246 Royalltrail Ln

O'Fallon, MO 63368

$298,000D-

2 bd · 2.0 ba · 1,757 sqft · Built 1994 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,215/mo
• Mortgage (P&I): −$1,563
• Tax + insurance: −$408
• HOA: −$20
• Vac / Maint / Mgmt: −$465
• Net cashflow: $-240/mo
• Annual: $-2,883/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.45%
• DSCR: 0.85
• 1% rule: 0.74%
• Cash to close: $83,440

Investor read

• This is a 2-bed/2.0-bath single-family listed at $298k.
• At list price, monthly cash flow is $-240 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $256k (14.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $222k (25.7% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $222k (25.7% 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 $9k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Ft. Zumwalt R-II (suburban): math 54% / reading 60% proficiency, ranked #14 of 324 in MO (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Pheasant Point Elem. (math 56% / reading 65%, grade B-, #118 of 1,115 statewide, top 11%, 436 students, 11% FRL); Ft. Zumwalt West High (math 64% / reading 72%, grade B, #13 of 521 statewide, top 2%, 1,778 students, 17% FRL) — zoned schools at 14% FRL track the district average.
• Market conditions: Rents rising (+1.6%/yr); 376 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,021 units permitted in St. Charles County in 2024 (568 in 5+ unit buildings).
• St. Charles County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $200k; 49% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% vs local median 3.2% in O'Fallon — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.