405 County Road 437

Chelsea, AL 35147

$249,000C

3 bd · 1.0 ba · 1,276 sqft · Built 1940 · SingleFamily · Active · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,102/mo
• Mortgage (P&I): −$1,306
• Tax + insurance: −$299
• HOA: −$0
• Vac / Maint / Mgmt: −$442
• Net cashflow: $56/mo
• Annual: $676/yr
• Cap rate: 6.88%
• Cash-on-cash: 2.11%
• DSCR: 1.09
• 1% rule: 0.84%
• Cash to close: $69,720

Investor read

• This is a 3-bed/1.0-bath single-family listed at $249k.
• At list price, monthly cash flow is $56 ($676/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 $210k (15.6% below list).
• It's been on market 98 days — a 9% lower offer ($227k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $210k (15.6% below list) — sets the bar for 1% rule.
• In year one you build about $3k of equity ($2k loan paydown + $2k appreciation (0.7% local appreciation)).
• Location reads 69/100 on livability (#52 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Shelby County (suburban): math 30% / reading 58% proficiency, ranked #16 of 129 in AL (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Chelsea Park Elementary School (math 46% / reading 68%, grade C+, #76 of 627 statewide, top 13%, 867 students, 31% FRL); Chelsea Middle School (math 26% / reading 63%, grade D, #39 of 257 statewide, top 16%, 951 students, 28% FRL); Chelsea High School (math 43% / reading 42%, grade F, #27 of 305 statewide, top 9%, 1,400 students, 23% FRL) — zoned schools at 27% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 95 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 987 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (0.7% appreciation + 3.0% rent growth), your $70k cash investment doubles in ~10 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk; major wind risk, 27% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.9% vs local median 4.1% in Chelsea — 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 98 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.