1018 Birch Dr

Lexington-Fayette, KY 40511

$200,000C

3 bd · 1.0 ba · 1,225 sqft · Built 1958 · SingleFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,912/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$164
• HOA: −$0
• Vac / Maint / Mgmt: −$402
• Net cashflow: $298/mo
• Annual: $3,579/yr
• Cap rate: 8.08%
• Cash-on-cash: 6.39%
• DSCR: 1.28
• 1% rule: 0.96%
• Cash to close: $56,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $298 ($4k/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 $191k (4.4% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $191k (4.4% below list) — sets the bar for 1% rule.
• 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: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Coventry Oak Elementary (math 19% / reading 25%, grade F, #525 of 676 statewide, top 82%, 674 students, 60% FRL); Winburn Middle School (math 26% / reading 36%, grade F, #138 of 217 statewide, top 65%, 800 students, 66% FRL); Bryan Station High School (math 18% / reading 25%, grade F, #209 of 254 statewide, top 82%, 1,893 students, 59% FRL) — zoned schools average 62% FRL vs 44% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 25% at this address vs 40% district-wide (-15 pts) — the specific schools serving this property underperform the Fayette County average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.9%/yr); 203 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 8.1% vs local median 3.8% in Lexington-Fayette — 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

• Built in 1958 — 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.