404 Mount Vernon Dr

Lexington-Fayette, KY 40391

$139,000C-

2 bd · 2.0 ba · 1,360 sqft · Built 1989 · Manufactured · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,370/mo
• Mortgage (P&I): −$729
• Tax + insurance: −$86
• HOA: −$0
• Vac / Maint / Mgmt: −$288
• Net cashflow: $268/mo
• Annual: $3,215/yr
• Cap rate: 8.61%
• Cash-on-cash: 8.26%
• DSCR: 1.37
• 1% rule: 0.99%
• Cash to close: $38,920

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $139k.
• At list price, monthly cash flow is $268 ($3k/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 $137k (1.4% below list).
• It's been on market 87 days — a 6% lower offer ($131k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $961 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Clark County (town): math 28% / reading 41% proficiency, ranked #64 of 165 in KY (top 39%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Strode Station Elementary School (math 32% / reading 32%, grade F, #348 of 676 statewide, top 55%, 506 students, 60% FRL); Robert D. Campbell Jr. High (math 28% / reading 47%, grade F, #73 of 217 statewide, top 36%, 820 students, 57% FRL).
• Market conditions: 291 active listings in the ZIP; 160 units permitted in Clark County in 2024 (61 in 5+ unit buildings).
• Clark County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 21y ago; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $65k; list at $139k implies a 114% gain — meaningful room to come down on a strong offer.
• Cap rate 8.6% 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

• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 6% 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.
• 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.