186 Rainbow Rd

Magnolia, NC 28398

$102,000C

2 bd · 1.0 ba · 736 sqft · Built 1950 · SingleFamily · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $998/mo
• Mortgage (P&I): −$535
• Tax + insurance: −$89
• HOA: −$0
• Vac / Maint / Mgmt: −$210
• Net cashflow: $164/mo
• Annual: $1,973/yr
• Cap rate: 8.23%
• Cash-on-cash: 6.91%
• DSCR: 1.31
• 1% rule: 0.98%
• Cash to close: $28,560

Investor read

• This is a 2-bed/1.0-bath single-family listed at $102k.
• At list price, monthly cash flow is $164 ($2k/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 $100k (2.1% below list).
• It's been on market 28 days — a 2% lower offer ($100k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $100k (2.1% below list) — sets the bar for 1% rule.
• In year one you build about $1k of equity ($705 loan paydown + $601 appreciation (0.6% local appreciation)).
• Location reads 56/100 on livability (#628 in NC) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, crime A-; Watch: amenities F, commute F, employment F.
• Duplin County Schools (rural): math 23% / reading 32% proficiency, ranked #153 of 178 in NC (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Warsaw Elementary (math 13% / reading 25%, grade F, #1,269 of 1,410 statewide, top 91%, 799 students, 100% FRL); James Kenan High (math 27% / reading 32%, grade F, #459 of 535 statewide, top 87%, 784 students, 100% FRL) — zoned schools average 100% FRL vs 74% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 43 active listings in the ZIP; 134 units permitted in Duplin County in 2024 (0 in 5+ unit buildings).
• Duplin County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (0.6% appreciation + 3.0% rent growth), your $29k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• Built in 1950 — 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.
• 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?
• 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.