505 Draper St

Paris, TN 38242

$37,000B-

2 bd · 1.0 ba · 1,008 sqft · Built 1938 · SingleFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $928/mo
• Mortgage (P&I): −$194
• Tax + insurance: −$48
• HOA: −$0
• Vac / Maint / Mgmt: −$195
• Net cashflow: $492/mo
• Annual: $5,900/yr
• Cap rate: 22.24%
• Cash-on-cash: 56.95%
• DSCR: 3.53
• 1% rule: 2.51%
• Cash to close: $10,360

Investor read

• This is a 2-bed/1.0-bath single-family listed at $37k.
• At list price, monthly cash flow is $492 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($928 rent vs $37k).
• It's been on market 17 days — a 2% lower offer ($36k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $36k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $256 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#13 in TN, #4,115 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities C-, commute F, employment F.
• Paris (town): math 42% / reading 32% proficiency, ranked #28 of 139 in TN (top 20%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: W G Rhea Elementary (571 students, 0% FRL) — zoned schools average 0% FRL vs 53% district-wide (53 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 191 active listings in the ZIP; 19 units permitted in Henry County in 2024 (0 in 5+ unit buildings).
• Henry County population projected to shrink 10% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $12k (24%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $21k; list at $37k implies a 76% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $10k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• Built in 1938 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.