113 Shipyard Dr #198

Hilton Head Island, SC 29928

$419,900D-

1 bd · 1.5 ba · 1,215 sqft · Built 1980 · Condo · Active · 110 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,592/mo
• Mortgage (P&I): −$2,202
• Tax + insurance: −$561
• HOA: −$767
• Vac / Maint / Mgmt: −$544
• Net cashflow: $-1,483/mo
• Annual: $-17,795/yr
• Cap rate: 2.24%
• Cash-on-cash: -14.46%
• DSCR: 0.36
• 1% rule: 0.62%
• Cash to close: $117,572

Investor read

• This is a 1-bed/1.5-bath condo listed at $420k.
• At list price, monthly cash flow is $-1k ($-18k/yr) — negative.
• To cash-flow at today's rent, offer at most $293k (30.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $259k (38.3% below list).
• It's been on market 110 days — a 9% lower offer ($382k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $259k (38.3% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($3k loan paydown + $13k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hilton Head Island Elementary (math 50% / reading 49%, grade D, #168 of 597 statewide, top 31%, 709 students, 56% FRL); Hilton Head Island Middle (math 33% / reading 42%, grade F, #90 of 229 statewide, top 42%, 856 students, 52% FRL); Hilton Head Island High (math 70% / reading 82%, grade A-, #34 of 196 statewide, top 17%, 1,345 students, 40% FRL) — zoned schools at 49% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo; HOA is 30% of rent.
• Market conditions: Rents rising (+3.2%/yr); 846 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 18y ago; this cycle's ask has dropped $29k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $220k; list at $420k implies a 91% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; 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 2.2% vs local median 2.9% in Hilton Head Island — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 110 days. Have you received any prior offers? Is the seller open to a 38% concession, seller financing, or rate buy-down credit?
• 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-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?