Charlotte III H Plan

Huntsville, AL 35748

$540,990D

5 bd · 3.0 ba · 3,270 sqft · Built — · SingleFamily · Active · 394 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,000/mo
• Mortgage (P&I): −$2,849
• Tax + insurance: −$906
• HOA: −$0
• Vac / Maint / Mgmt: −$840
• Net cashflow: $-595/mo
• Annual: $-7,138/yr
• Cap rate: 4.98%
• Cash-on-cash: -4.69%
• DSCR: 0.79
• 1% rule: 0.74%
• Cash to close: $152,132

Investor read

• This is a 5-bed/3.0-bath single-family listed at $541k.
• At list price, monthly cash flow is $-595 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $457k (15.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $400k (26.1% below list).
• It's been on market 394 days — a 12% lower offer ($476k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $400k (26.1% below list) — sets the bar for 1% rule.
• In year one you build about $58k of equity ($4k loan paydown + $54k 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.
• Zoned schools: Madison County Elementary School (math 17% / reading 47%, grade F, #331 of 627 statewide, top 57%, 412 students, 59% FRL); Madison County High School (math 32% / reading 42%, grade F, #39 of 305 statewide, top 13%, 483 students, 35% FRL) — zoned schools average 47% FRL vs 29% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 183 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• By year 2, paydown + projected appreciation supports a ~$93k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.0% 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.

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 394 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• 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?
• 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.