1633 Sunset Dr

Homewood, AL 35216

$449,900D

3 bd · 3.0 ba · 2,478 sqft · Built 1995 · SingleFamily · Active · 97 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,163/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$354
• HOA: −$0
• Vac / Maint / Mgmt: −$664
• Net cashflow: $-215/mo
• Annual: $-2,576/yr
• Cap rate: 5.72%
• Cash-on-cash: -2.05%
• DSCR: 0.91
• 1% rule: 0.70%
• Cash to close: $125,972

Investor read

• This is a 3-bed/3.0-bath single-family listed at $450k.
• At list price, monthly cash flow is $-215 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $412k (8.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $316k (29.7% below list).
• It's been on market 97 days — a 9% lower offer ($409k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $316k (29.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#5 in AL, #1,730 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: cost of living F.
• Jefferson County (suburban): math 9% / reading 32% proficiency, ranked #104 of 129 in AL (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Irondale Middle School (math 2% / reading 35%, grade F, #195 of 257 statewide, top 76%, 467 students, 58% FRL); Shades Valley High School (math 29% / reading 39%, grade F, #53 of 305 statewide, top 18%, 1,200 students, 68% FRL).
• Market conditions: Rents rising (+2.6%/yr); 139 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $162k; list at $450k implies a 179% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 2.2% in Homewood — 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 $3,163/mo this rent would consume 51% of the median local household income ($75k/yr) (locally 1747% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 97 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• 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 A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.