5838 Sierra Dr NW

Hollins, VA 24012

$258,500C-

3 bd · 1.5 ba · 1,728 sqft · Built 1967 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,281/mo
• Mortgage (P&I): −$1,356
• Tax + insurance: −$320
• HOA: −$0
• Vac / Maint / Mgmt: −$479
• Net cashflow: $126/mo
• Annual: $1,517/yr
• Cap rate: 6.88%
• Cash-on-cash: 2.10%
• DSCR: 1.09
• 1% rule: 0.88%
• Cash to close: $72,380

Investor read

• This is a 3-bed/1.5-bath single-family listed at $258k.
• At list price, monthly cash flow is $126 ($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 $228k (11.7% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $228k (11.7% 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 $8k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#126 in VA, #4,055 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Roanoke County Public School District (suburban): math 71% / reading 78% proficiency, ranked #9 of 131 in VA (top 7%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Burlington Elementary (math 47% / reading 62%, grade C, #650 of 1,108 statewide, top 62%, 483 students, 78% FRL); Northside Middle (math 63% / reading 68%, grade A-, #116 of 342 statewide, top 35%, 627 students, 53% FRL); Northside High (math 80% / reading 87%, grade A, #30 of 319 statewide, top 10%, 950 students, 47% FRL) — zoned schools average 60% FRL vs 22% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+10.5%/yr); 194 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 360 units permitted in Roanoke County in 2024 (228 in 5+ unit buildings).
• Roanoke County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 15y 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.
• Current owner paid $140k; list at $258k implies a 85% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.9% vs local median 3.9% in Hollins — 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.
• At $2,281/mo this rent would consume 52% of the median local household income ($53k/yr) (locally 1360% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.