900 Mountain Creek Rd #038

Chattanooga, TN 37405

$129,000D

2 bd · 2.0 ba · 950 sqft · Built 1975 · SingleFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,335/mo
• Mortgage (P&I): −$676
• Tax + insurance: −$642
• HOA: −$346
• Vac / Maint / Mgmt: −$280
• Net cashflow: $-609/mo
• Annual: $-7,313/yr
• Cap rate: 4.59%
• Cash-on-cash: -6.08%
• DSCR: 0.73
• 1% rule: 1.03%
• Cash to close: $36,120

Investor read

• This is a 2-bed/2.0-bath single-family listed at $129k. Condition is rated fair.
• At list price, monthly cash flow is $-609 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $41k (68.4% below list).
• Meets the 1% rule at list price ($1k rent vs $129k).
• It's been on market 20 days — a 2% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $41k (68.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $892 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#3 in TN, #2,582 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D+, crime F.
• Hamilton County (urban): math 31% / reading 31% proficiency, ranked #42 of 139 in TN (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Red Bank Elementary (math 33% / reading 29%, grade F, #400 of 952 statewide, top 43%, 588 students, 0% FRL); Red Bank Middle School (math 14% / reading 13%, grade F, #236 of 333 statewide, top 71%, 535 students, 0% FRL); Red Bank High School (math 8% / reading 37%, grade F, #156 of 332 statewide, top 49%, 824 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.
• Watch-outs: flood insurance adds $427/mo; HOA is 26% of rent.
• Market conditions: Rents rising fast (+5.6%/yr); 423 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); 42% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 2,133 units permitted in Hamilton County in 2024 (405 in 5+ unit buildings).
• Hamilton County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $11k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); extreme-heat days projected 9→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 3.5% in Chattanooga — 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

• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1975 — 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?
• 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.
• Schools are F-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 F 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?

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and worn
• Moderate: kitchen countertops — dated and worn
• Moderate: bathroom fixtures — dated and worn
• Moderate: bathroom tile — dated and worn