12 Valencia Rd #2

Hilton Head Island, SC 29928

$519,000F

2 bd · 2.5 ba · 1,200 sqft · Built 1985 · Condo · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,906/mo
• Mortgage (P&I): −$2,722
• Tax + insurance: −$869
• HOA: −$777
• Vac / Maint / Mgmt: −$820
• Net cashflow: $-1,282/mo
• Annual: $-15,385/yr
• Cap rate: 3.33%
• Cash-on-cash: -10.59%
• DSCR: 0.53
• 1% rule: 0.75%
• Cash to close: $145,320

Investor read

• This is a 2-bed/2.5-bath condo listed at $519k.
• At list price, monthly cash flow is $-1k ($-15k/yr) — negative.
• To cash-flow at today's rent, offer at most $430k (17.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $391k (24.7% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $391k (24.7% below list) — sets the bar for 1% rule.
• In year one you build about $20k of equity ($4k loan paydown + $17k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.2%/yr); 838 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 5y 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.
• By year 2, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• At $3,906/mo this rent would consume 48% of the median local household income ($98k/yr) (locally 216% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.