1251 Mcpherson Rd

Mount Olive, AL 35117

$132,000B-

4 bd · 2.0 ba · 2,546 sqft · Built 1974 · SingleFamily · Pending · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,936/mo
• Mortgage (P&I): −$692
• Tax + insurance: −$124
• HOA: −$0
• Vac / Maint / Mgmt: −$407
• Net cashflow: $714/mo
• Annual: $8,562/yr
• Cap rate: 12.78%
• Cash-on-cash: 23.17%
• DSCR: 2.03
• 1% rule: 1.47%
• Cash to close: $36,960

Investor read

• This is a 4-bed/2.0-bath single-family listed at $132k.
• At list price, monthly cash flow is $714 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $132k).
• It's been on market 41 days — a 3% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $128k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $913 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#150 in AL) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Jefferson County (suburban): math 9% / reading 32% proficiency, ranked #104 of 129 in AL (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 65 active listings in the ZIP; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $65k; list at $132k implies a 103% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $37k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 12.8% vs local median 5.1% in Mount Olive — 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

• It's been on market 41 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1974 — 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.