464 Lou Gray Dr

Tri-City, OR 97457

$125,000D+

2 bd · 1.0 ba · 668 sqft · Built 1956 · Other · Active · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,151/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$87
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $167/mo
• Annual: $2,004/yr
• Cap rate: 7.90%
• Cash-on-cash: 5.73%
• DSCR: 1.25
• 1% rule: 0.92%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath other listed at $125k.
• At list price, monthly cash flow is $167 ($2k/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 $115k (7.9% below list).
• It's been on market 136 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• South Umpqua SD 19 (town): math 21% / reading 34% proficiency, ranked #51 of 58 in OR (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Tri City Elementary School (math 15% / reading 34%, grade F, #309 of 412 statewide, top 77%, 285 students, 70% FRL); Coffenberry Middle School (math 22% / reading 32%, grade F, #96 of 128 statewide, top 78%, 284 students, 72% FRL); South Umpqua High School (math 24% / reading 44%, grade F, #94 of 143 statewide, top 70%, 443 students, 72% FRL).
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 125 active listings in the ZIP; 190 units permitted in Douglas County in 2024 (0 in 5+ unit buildings).
• Douglas County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.9% vs local median 3.3% in Tri-City — 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 136 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1956 — 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.
• 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.