Mitchell Townhome Plan

Seymour, TN 37865

$293,990D

4 bd · 2.5 ba · 1,554 sqft · Built — · Townhouse · Active · 221 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,544/mo
• Mortgage (P&I): −$1,594
• Tax + insurance: −$506
• HOA: −$0
• Vac / Maint / Mgmt: −$534
• Net cashflow: $-90/mo
• Annual: $-1,085/yr
• Cap rate: 5.94%
• Cash-on-cash: -1.28%
• DSCR: 0.94
• 1% rule: 0.84%
• Cash to close: $85,084

Investor read

• This is a 4-bed/2.5-bath townhouse listed at $294k. Condition is rated excellent.
• At list price, monthly cash flow is $-90 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $291k (1.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $254k (13.5% below list).
• It's been on market 221 days — a 12% lower offer ($259k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $254k (13.5% 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 64/100 on livability (#165 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D-, amenities F, commute F.
• Sevier County (rural): math 31% / reading 28% proficiency, ranked #62 of 139 in TN (top 45%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: New Center Elementary (math 32% / reading 28%, grade F, #415 of 952 statewide, top 44%, 855 students, 0% FRL); Seymour Junior High (math 40% / reading 30%, grade F, #65 of 333 statewide, top 20%, 766 students, 0% FRL); Sevier County High School (math 20% / reading 38%, grade F, #92 of 332 statewide, top 28%, 1,248 students, 0% FRL) — zoned schools average 0% FRL vs 52% district-wide (52 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising (+2.3%/yr); 230 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 42d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,594 units permitted in Sevier County in 2024 (456 in 5+ unit buildings).
• Sevier County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% vs local median 3.2% in Seymour — 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.
• This rent runs 35% of the median local income ($88k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• It's been on market 221 days. Have you received any prior offers? Is the seller open to a 13% 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.