5220 Clay Lane Highway 43

Northport, AL 35473

$225,000D+

4 bd · 2.0 ba · 2,016 sqft · Built 2010 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,929/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$375
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $-31/mo
• Annual: $-371/yr
• Cap rate: 6.13%
• Cash-on-cash: -0.59%
• DSCR: 0.97
• 1% rule: 0.86%
• Cash to close: $63,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-31 ($-371/yr) — negative.
• To cash-flow at today's rent, offer at most $221k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $193k (14.3% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $193k (14.3% 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 $7k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#8 in AL, #2,686 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Tuscaloosa County (suburban): math 21% / reading 45% proficiency, ranked #47 of 129 in AL (top 36%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Crestmont Elementary School (math 22% / reading 42%, grade F, #331 of 627 statewide, top 57%, 270 students, 79% FRL); Tuscaloosa County High School (math 26% / reading 30%, grade F, #87 of 305 statewide, top 29%, 1,545 students, 55% FRL) — zoned schools average 67% FRL vs 45% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 111 active listings in the ZIP; 622 units permitted in Tuscaloosa County in 2024 (69 in 5+ unit buildings).
• Tuscaloosa County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y 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.
• Climate carrying-cost: major wind risk, 46% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 6→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 4.2% in Northport — 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.
• This rent runs 33% of the median local income ($70k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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.