LEWIS Plan

Varnamtown, NC 28422

$233,990D

3 bd · 2.0 ba · 1,256 sqft · Built — · SingleFamily · Active · 620 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,110/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$458
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $-23/mo
• Annual: $-274/yr
• Cap rate: 6.52%
• Cash-on-cash: 0.80%
• DSCR: 1.04
• 1% rule: 0.90%
• Cash to close: $65,764

Investor read

• This is a 3-bed/2.0-bath single-family listed at $234k.
• At list price, monthly cash flow is $-23 ($-274/yr) — negative.
• To cash-flow at today's rent, offer at most $232k (1.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (9.8% below list).
• It's been on market 620 days — a 12% lower offer ($206k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $206k (12.0% below list) — sets the bar for market timing.
• 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 60/100 on livability (#521 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A, employment B; Watch: crime D, health & safety D, amenities F.
• Brunswick County Schools (rural): math 45% / reading 47% proficiency, ranked #82 of 178 in NC (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Virginia Williamson Elem (math 50% / reading 49%, grade D, #417 of 1,410 statewide, top 32%, 502 students, 99% FRL); Cedar Grove Middle (math 30% / reading 36%, grade F, #305 of 475 statewide, top 65%, 434 students, 99% FRL); South Brunswick High (math 62% / reading 57%, grade C+, #216 of 535 statewide, top 43%, 1,172 students, 100% FRL) — zoned schools average 99% FRL vs 53% district-wide (46 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 575 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 6,112 units permitted in Brunswick County in 2024 (990 in 5+ unit buildings).
• Brunswick County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe flood risk; severe wind risk, 99% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 3.8% in Varnamtown — 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.
• This rent runs 36% of the median local income ($69k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 620 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 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?