2400 Justin Pl

Lexington-Fayette, KY 40509

$225,000D+

3 bd · 2.5 ba · 1,552 sqft · Built 2000 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,843/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$235
• HOA: −$0
• Vac / Maint / Mgmt: −$387
• Net cashflow: $42/mo
• Annual: $499/yr
• Cap rate: 6.51%
• Cash-on-cash: 0.79%
• DSCR: 1.04
• 1% rule: 0.82%
• Cash to close: $63,000

Investor read

• This is a 3-bed/2.5-bath single-family listed at $225k.
• At list price, monthly cash flow is $42 ($499/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $184k (18.1% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $184k (18.1% 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: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Liberty Elementary (math 35% / reading 42%, grade F, #234 of 676 statewide, top 36%, 722 students, 38% FRL); Crawford Middle School (math 15% / reading 31%, grade F, #197 of 217 statewide, top 92%, 751 students, 68% FRL); Frederick Douglass High School (math 36% / reading 42%, grade F, #51 of 254 statewide, top 21%, 1,667 students, 43% FRL).
• Market conditions: Rents rising (+2.2%/yr); 280 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 26y 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.
• Current owner paid $140k; list at $225k implies a 61% gain — meaningful room to come down on a strong offer.
• Cap rate 6.5% vs local median 3.8% in Lexington-Fayette — 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

• 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.