284 Circle Dr

Rainsville, AL 35986

$222,000D

3 bd · 1.0 ba · 1,848 sqft · Built 1974 · SingleFamily · Active · 158 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,105/mo
• Mortgage (P&I): −$1,164
• Tax + insurance: −$199
• HOA: −$0
• Vac / Maint / Mgmt: −$232
• Net cashflow: $-490/mo
• Annual: $-5,882/yr
• Cap rate: 4.00%
• Cash-on-cash: -8.18%
• DSCR: 0.64
• 1% rule: 0.50%
• Cash to close: $62,160

Investor read

• This is a 3-bed/1.0-bath single-family listed at $222k.
• At list price, monthly cash flow is $-490 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $135k (39.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $111k (50.2% below list).
• It's been on market 158 days — a 12% lower offer ($195k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $111k (50.2% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#105 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools D+, amenities F, commute F.
• Dekalb County (rural): math 18% / reading 37% proficiency, ranked #82 of 129 in AL (top 64%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 72 active listings in the ZIP; 49 units permitted in DeKalb County in 2024 (0 in 5+ unit buildings).
• DeKalb County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• By year 2, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.0% vs local median 2.3% in Rainsville — 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

• 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?
• It's been on market 158 days. Have you received any prior offers? Is the seller open to a 50% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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?