205 E Tennessee Ave

Oak Ridge, TN 37830

$198,500B

2 bd · 3.0 ba · 2,178 sqft · Built 1943 · MultiFamily · Active · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,216/mo
• Mortgage (P&I): −$1,041
• Tax + insurance: −$226
• HOA: −$0
• Vac / Maint / Mgmt: −$675
• Net cashflow: $1,274/mo
• Annual: $15,289/yr
• Cap rate: 14.00%
• Cash-on-cash: 27.51%
• DSCR: 2.22
• 1% rule: 1.62%
• Cash to close: $55,580

Investor read

• This is a 2-bed/3.0-bath multifamily listed at $198k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $198k).
• It's been on market 53 days — a 3% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#4 in TN, #2,605 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F.
• Oak Ridge (suburban): math 34% / reading 37% proficiency, ranked #23 of 139 in TN (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Glenwood Elementary (math 67% / reading 52%, grade B-, #60 of 952 statewide, top 7%, 367 students, 0% FRL); Jefferson Middle School (math 32% / reading 33%, grade F, #81 of 333 statewide, top 26%, 721 students, 0% FRL); Oak Ridge High School (math 10% / reading 53%, grade F, #69 of 332 statewide, top 21%, 1,587 students, 0% FRL) — zoned schools average 0% FRL vs 40% district-wide (40 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1943 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.1%/yr); 189 active listings in the ZIP; 400 units permitted in Anderson County in 2024 (91 in 5+ unit buildings).
• 3 sale attempts since 20y ago; this cycle's ask has dropped $18k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $117k; list at $198k implies a 70% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.1% rent growth), your $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.0% vs local median 3.4% in Oak Ridge — 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 $3,216/mo this rent would consume 53% of the median local household income ($72k/yr) (locally 914% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 53 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1943 — 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.