401 20th St S #306

Birmingham, AL 35233

$180,000F

1 bd · 1.0 ba · 966 sqft · Built 2007 · Condo · Active · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,657/mo
• Mortgage (P&I): −$944
• Tax + insurance: −$372
• HOA: −$619
• Vac / Maint / Mgmt: −$348
• Net cashflow: $-626/mo
• Annual: $-7,506/yr
• Cap rate: 2.12%
• Cash-on-cash: -14.89%
• DSCR: 0.34
• 1% rule: 0.92%
• Cash to close: $50,400

Investor read

• This is a 1-bed/1.0-bath condo listed at $180k.
• At list price, monthly cash flow is $-626 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $179k (0.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $166k (8.0% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $166k (8.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.3%/yr); year-one equity from $1k of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#78 in AL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities C-, schools F, crime F.
• Birmingham City (urban): math 4% / reading 20% proficiency, ranked #116 of 129 in AL (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: HOA is 37% of rent.
• Market conditions: Rents soft (-2.8%/yr); 54 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• Cap rate 2.1% vs local median 6.2% in Birmingham — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 33% of the median local income ($60k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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?
• 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?
• 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?
• 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.