138 Locust Cir

Monticello, AR 71655

$15,500D

3 bd · 1.0 ba · 1,456 sqft · Built 1965 · SingleFamily · Under Contract · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $989/mo
• Mortgage (P&I): −$81
• Tax + insurance: −$13
• HOA: −$0
• Vac / Maint / Mgmt: −$208
• Net cashflow: $686/mo
• Annual: $8,238/yr
• Cap rate: 59.44%
• Cash-on-cash: 189.81%
• DSCR: 9.45
• 1% rule: 6.38%
• Cash to close: $4,340

Investor read

• This is a 3-bed/1.0-bath single-family listed at $16k.
• At list price, monthly cash flow is $686 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($989 rent vs $16k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $107 of loan paydown is wiped out by about $465 of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#72 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: schools F, crime D-, amenities F.
• Monticello School District (town): math 30% / reading 29% proficiency, ranked #161 of 238 in AR (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 114 active listings in the ZIP; 16 units permitted in Drew County in 2024 (0 in 5+ unit buildings).
• Drew County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $4k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 59.4% vs local median 2.9% in Monticello — 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

• Built in 1965 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.