789 Plummer Rd

Huntsville, AL 35806

$305,000A

2 bd · 1.0 ba · 2,760 sqft · Built 1970 · MultiFamily · Active · 616 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,237/mo
• Mortgage (P&I): −$1,599
• Tax + insurance: −$228
• HOA: −$0
• Vac / Maint / Mgmt: −$890
• Net cashflow: $1,520/mo
• Annual: $18,237/yr
• Cap rate: 12.27%
• Cash-on-cash: 21.35%
• DSCR: 1.95
• 1% rule: 1.39%
• Cash to close: $85,400

Investor read

• This is a 2-bed/1.0-bath multifamily listed at $305k.
• At list price, monthly cash flow is $2k ($18k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $305k).
• It's been on market 616 days — a 12% lower offer ($268k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $268k (12.0% below list) — sets the bar for market timing.
• In year one you build about $33k of equity ($2k loan paydown + $30k appreciation (10.0% local appreciation)).
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Madison County (rural): math 27% / reading 56% proficiency, ranked #19 of 129 in AL (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.6%/yr); 213 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $170k (36%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 2.6% rent growth), your $85k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$52k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.3% vs local median 3.8% in Huntsville — 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.
• At $4,237/mo this rent would consume 59% of the median local household income ($87k/yr) (locally 1249% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 616 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1970 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• Crime grade is F 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.