3384 Pueblo Ct

Lexington-Fayette, KY 40509

$299,000D

3 bd · 2.0 ba · 1,269 sqft · Built 2000 · SingleFamily · Active · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,356/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$253
• HOA: −$0
• Vac / Maint / Mgmt: −$495
• Net cashflow: $40/mo
• Annual: $481/yr
• Cap rate: 6.45%
• Cash-on-cash: 0.57%
• DSCR: 1.03
• 1% rule: 0.79%
• Cash to close: $83,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $299k.
• At list price, monthly cash flow is $40 ($481/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $236k (21.2% below list).
• It's been on market 40 days — a 3% lower offer ($290k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $236k (21.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Liberty Elementary (math 35% / reading 42%, grade F, #234 of 676 statewide, top 36%, 722 students, 38% FRL); Crawford Middle School (math 15% / reading 31%, grade F, #197 of 217 statewide, top 92%, 751 students, 68% FRL); Frederick Douglass High School (math 36% / reading 42%, grade F, #51 of 254 statewide, top 21%, 1,667 students, 43% FRL).
• Market conditions: Rents rising (+2.2%/yr); 279 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 26y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $255k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.5% vs local median 3.8% in Lexington-Fayette — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 40 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.