606 Mustang Dr

Dothan, AL 36301

$112,000C+

4 bd · 1.0 ba · 1,377 sqft · Built 1968 · SingleFamily · Pending · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,203/mo
• Mortgage (P&I): −$587
• Tax + insurance: −$90
• HOA: −$0
• Vac / Maint / Mgmt: −$253
• Net cashflow: $272/mo
• Annual: $3,270/yr
• Cap rate: 9.21%
• Cash-on-cash: 10.43%
• DSCR: 1.46
• 1% rule: 1.07%
• Cash to close: $31,360

Investor read

• This is a 4-bed/1.0-bath single-family listed at $112k.
• At list price, monthly cash flow is $272 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $112k).
• It's been on market 54 days — a 3% lower offer ($109k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $774 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#146 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, crime F, amenities F.
• Dothan City (urban): math 19% / reading 39% proficiency, ranked #73 of 129 in AL (top 57%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Dothan Preparatory Academy (math 12% / reading 38%, grade F, #163 of 257 statewide, top 64%, 1,133 students, 78% FRL) — zoned schools average 78% FRL vs 59% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 412 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 463 units permitted in Houston County in 2024 (96 in 5+ unit buildings).
• Houston County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 3y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 4.4% in Dothan — 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 54 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1968 — 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 D-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?
• 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.