538 Arrowwood Blvd

Freeport, FL 32439

$394,850D-

5 bd · 4.0 ba · 2,444 sqft · Built 2026 · SingleFamily · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,185/mo
• Mortgage (P&I): −$2,071
• Tax + insurance: −$658
• HOA: −$88
• Vac / Maint / Mgmt: −$669
• Net cashflow: $-301/mo
• Annual: $-3,611/yr
• Cap rate: 5.38%
• Cash-on-cash: -3.27%
• DSCR: 0.85
• 1% rule: 0.81%
• Cash to close: $110,558

Investor read

• This is a 5-bed/4.0-bath single-family listed at $395k. Condition is rated excellent.
• At list price, monthly cash flow is $-301 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $351k (11.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $318k (19.3% below list).
• It's been on market 29 days — a 2% lower offer ($389k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $318k (19.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#520 in FL) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment B+; Watch: health & safety C-, amenities F, commute F.
• Walton (rural): math 62% / reading 61% proficiency, ranked #10 of 73 in FL (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Freeport Elementary School (math 50% / reading 57%, grade C, #949 of 2,144 statewide, top 45%, 1,123 students, 55% FRL); Emerald Coast Middle School (math 70% / reading 65%, grade A-, #77 of 571 statewide, top 14%, 868 students, 24% FRL); South Walton High School (math 61% / reading 73%, grade B, #69 of 667 statewide, top 11%, 1,235 students, 20% FRL) — zoned schools average 33% FRL vs 48% district-wide (15 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising (+1.4%/yr); 1230 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 2,883 units permitted in Walton County in 2024 (1,322 in 5+ unit buildings).
• Walton County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 5.4% vs local median 3.5% in Freeport — 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 $3,185/mo this rent would consume 46% of the median local household income ($83k/yr) — 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?
• 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.