Is 188 Waters Edge Ln #188 in Madison, AL a good investment?

CashFlowRE grades it C- with a 4.6% cap rate and $-196/mo modeled cash flow at a $140,000 list price. See the full underwriting and recommended offer on the page.

What is the cap rate for 188 Waters Edge Ln #188?

The modeled cap rate is 4.6% — annual NOI divided by price, using CashFlowRE's rent and expense estimates.

What would this property rent for?

Estimated market rent is $1,226/month, from CashFlowRE's rent model.

C- Composite 51.33

Why this score? — see what drove the C- grade

The composite is a weighted blend of 9 inputs, each scored 0–100. Each bar is that input's sub-score; the figure is the points it added to the 100-point composite (weight × sub-score).

ARV discount +12.6/15.0
Appreciation +10.0/10.0
Cash flow +7.1/30.0
Schools +5.8/10.0
Condition / age +4.0/5.0
1% rule +3.8/10.0
Livability +3.8/5.0
Rent growth +2.9/5.0
DSCR +1.3/10.0

$140,000

188 Waters Edge Ln #188 · Madison, AL 35758

2 bd · 1.0 ba · 732 sqft · Condo · 86 Days on market

Built 1988 Good condition $191/sqft · 11% below area Est $158k · 11% under $197/mo HOA · 16% of rent

🖨 Deal sheet (PDF) 📄 Offer letter ✓ Due diligence

Listing remarks

Upstairs condo in the heart of Madison! This 2 bed, 1 bath unit features updated flooring, fresh neutral paint, and abundant natural light throughout. The living room showcases vaulted ceilings and a sleek electric fireplace, creating a warm and open gathering space. The kitchen offers modern cabinetry, stainless appliances, ample counter space, and a breakfast bar open to the main living area. Enjoy a charming outdoor sitting area at the private entrance, plus a spacious primary bedroom and renovated bath with a beautifully tiled walk-in shower. Convenient location with easy access to I-565, Research Park, Redstone Arsenal, shopping, and dining!

Key facts

Modern cabinetry
Stainless appliances
Updated flooring

What this means for you Summary

Snapshot

This is a 2-bed/1.0-bath condo listed at $140k. Condition is rated good.

Deal economics

At list price, monthly cash flow is $-196 ($-2k/yr) — negative.
To cash-flow at today's rent, offer at most $112k (20.3% below list).
To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (12.4% below list).
Recommended offer: $112k (20.3% below list) — sets the bar for cash-flow.
Cap rate 4.6% vs local median 3.0% in Madison — 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.

Location & tenants

Location reads 76/100 on livability (#12 in AL, #3,280 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: amenities F, commute F.
Madison City (suburban): math 51% / reading 71% proficiency, ranked #4 of 129 in AL (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
Zoned schools: Midtown Elementary School (math 49% / reading 78%, grade B, #46 of 627 statewide, top 8%, 999 students, 26% FRL); Discovery Middle School (math 46% / reading 69%, grade B, #13 of 257 statewide, top 5%, 1,334 students, 25% FRL); Bob Jones High School (math 53% / reading 51%, grade D+, #11 of 305 statewide, top 4%, 1,920 students, 24% FRL).
Market conditions: Rents rising (+1.6%/yr); 470 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
This rent is only 13% of the median local income ($117k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Forward outlook

In year one you build about $15k of equity ($968 loan paydown + $14k appreciation (10.0% local appreciation)).
Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
By year 3, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Negotiation context

It's been on market 86 days — a 6% lower offer ($132k) is reasonable based on typical stale-listing flexibility.
2 sale attempts 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.

Risks & watch-outs

Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Recommended offer $111,634 (20.3% below list)

Questions for the 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 86 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
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 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?
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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.

Investment metrics

1% rule: 0.88% ✗
Cap rate: 4.61%
Cash-on-cash: -6.00%
DSCR: 0.73
GRM: 9.5

CMA / ARV

ARV (median comp): $158,005
List price: $140,000
Delta: -11.40%
Verdict: UNDERPRICED
Comps: 20 within 1.0 mi

Show comp detail 12 sales within ~0.75 mi

Address	Dist	Beds/Ba	Sqft	Sold	Price	$/sf	Match
161 Unit 6 Waters Edge Ln #6	0.05mi	2/1.0	800 (+9%)	1mo	$150,000	$188	81
183 Waters Edge Ln	0.03mi	2/2.0	868 (+19%)	0mo	$140,000	$161	69
112 Waters Edge Ln Bldg 1	0.08mi	2/1.0	776 (+6%)	22mo	$137,000	$177	68
144 Waters Edge Ln #144	0.05mi	1/1.0 (-1)	633 (-14%)	5mo	$127,000	$201	66
175 Waters Edge Ln #5	0.04mi	1/1.0 (-1)	867 (+18%)	17mo	$149,000	$172	54
195 Waters Edge Ln	0.04mi	1/1.0 (-1)	831 (+14%)	28mo	$149,500	$180	51
2009 Liberty Dr #2009	1.31mi	2/2.0	908 (+24%)	7mo	$125,000	$138	30
206 Pension Row	1.30mi	1/1.0 (-1)	823 (+12%)	12mo	$155,000	$188	29
2101 Liberty Dr #2101	1.29mi	2/2.0	894 (+22%)	10mo	$155,000	$173	28
2002 Liberty Dr Unit n/a	1.32mi	2/2.0	908 (+24%)	18mo	$138,000	$152	21
112 Arnett St	1.27mi	2/1.0	900 (+23%)	26mo	$100,000	$111	20
4212 Sullivan St	1.24mi	3/1.0 (+1)	875 (+20%)	25mo	$197,000	$225	15

Match score weights: distance 35% · size 25% · config 20% · recency 20%. Top-matched comps best support the ARV.

Projected returns pro-forma

10.0% appreciation · 1.58% rent growth · sell at horizon

5-year hold

IRR: 19.6%
Equity multiple: 2.59×
Total profit: $62,175
Equity at exit: $126,123

10-year hold

IRR: 17.7%
Equity multiple: 5.84×
Total profit: $189,885
Equity at exit: $271,989

Cash invested: $39,200 (down + closing). Projections, not guarantees.

Landlord ↔ Tenant lean methodology

Overall (STATE): 90 Strongly Landlord-Friendly
State Alabama: 90 Strongly Landlord-Friendly · R+15
County: — inherits STATE
City: — inherits STATE

Right-to-evict in 7 days for non-payment; no rent control; preempted statewide; courts move quickly.

Methodology + full state rankings →

Active competition Active MLS

For sale now: 2 active
Median asking: $145,000 ($182/sqft)
Median days on market: 23 d
This list price: lowest-priced of the active set
ARV vs active asking: +18.6% above current asking $/sqft

Closed sales set the value; these active listings set current market conditions and a practical price ceiling.

ZIP-level market 35758

Home prices YoY: 4.2%
Rents YoY: 1.6%
Active inventory: 470
Price-to-rent: 9.5×

Monthly cashflow live

Estimated rent: $1,226 medium interval (Pro) →
Mortgage (P&I): −$734
Tax est. 1.5%: −$175 /mo · $2,100/yr
Insurance: −$58
HOA: −$197
Lot rent: −$0
Vacancy / Maint / Mgmt: −$257
Net cashflow: $-196

Break-even live

Break-even rent $1,474

Max offer price $111,634

Occupancy floor —

Sensitivity live

Price	-10% $-99	-5% $-148	+0% $-196	+5% $-244	+10% $-293
Rent	-10% $-293	-5% $-244	+0% $-196	+5% $-148	+10% $-99
Rate	-1.0pp $-126	-0.5pp $-160	base $-196	+0.5pp $-232	+1.0pp $-269

UW: 25.0% down · 7.5% · 30yr · 1.5% tax · 5.0% vac · 8.0% maint · 8.0% mgmt

Financing live

Cash to close

Down payment: $35,000
Closing costs: $4,200
Club membership (one-time): —
Reserves months: —
Total cash needed: —

Loan-product check · same deal, 3 products live

Conventional

25% down · 7.5% · 30yr

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

Personal DTI + credit; lowest rate.

DSCR

20% down · 8.5% · 30yr

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

No personal income docs; deal must DSCR.

Hard money

10% down · 12.0% · 12mo

Cash invested: —
Monthly P&I: —
Monthly cashflow: —
DSCR: —
Eligible?: —

Short-term bridge; refi at stabilization.

Rent comps 2 comps

Address	Beds	Baths	Sqft	Rent	$/sqft	DOM	Units	Dist
7584 Madison Pike Madison, AL	1.0–3.0	1.0–2.0	1023	$1,118	$1.09	63d	17	1.30mi
194 Shelton Rd Madison, AL	2.0	1.0–2.0	729	$1,149	$1.58	63d	9	1.45mi

Property features AI

Finance

Other: Unit is part of a condominium communityLiving area reported as 732 square feet
HOA & community: HOA with monthly fee (approx. $197)Subdivision: Madison Towne Centre

Exterior

Parking: Paved asphalt drivewayParking lot
Utilities: Public waterPublic sewerElectric power (implied by electric fireplace)
Home design: Residential condominiumBuilt in 1988
Construction: Slab foundation
Exterior features: Park nearby

Interior

Bedrooms: Number of full bathrooms: 1
Bathrooms: 1 full bathroom
Heating & cooling: Central heatingCentral cooling
Interior features: Five total roomsOne fireplace (electric)

HOA detail $197/mo · $2,364/yr condo

Likely covers: electric
Assessments: None detected in remarks — confirm with the listing agent.

Listing history 50 events

2026-08-08

days on market $140,000 Active 86 DOM
2026-08-07

days on market $140,000 Active 85 DOM
2026-08-06

days on market $140,000 Active 84 DOM
2026-08-05

days on market $140,000 Active 83 DOM
2026-08-04

days on market $140,000 Active 82 DOM
2026-08-03

days on market $140,000 Active 81 DOM
2026-07-31

days on market $140,000 Active 78 DOM
2026-07-30

days on market $140,000 Active 77 DOM
2026-07-29

days on market $140,000 Active 76 DOM
2026-07-27

days on market $140,000 Active 74 DOM
2026-07-25

days on market $140,000 Active 72 DOM
2026-07-23

days on market $140,000 Active 70 DOM
2026-07-22

days on market $140,000 Active 69 DOM
2026-07-21

days on market $140,000 Active 68 DOM
2026-07-18

days on market $140,000 Active 65 DOM
2026-07-16

days on market $140,000 Active 63 DOM
2026-07-16

days on market $140,000 Active 62 DOM
2026-07-14

days on market $140,000 Active 61 DOM
2026-07-14

days on market $140,000 Active 60 DOM
2026-07-12

days on market $140,000 Active 59 DOM
2026-07-11

days on market $140,000 Active 58 DOM
2026-07-10

days on market $140,000 Active 57 DOM
2026-07-09

days on market $140,000 Active 56 DOM
2026-07-08

days on market $140,000 Active 55 DOM
2026-07-07

days on market $140,000 Active 54 DOM
2026-07-06

days on market $140,000 Active 53 DOM
2026-07-05

days on market $140,000 Active 52 DOM
2026-07-04

days on market $140,000 Active 51 DOM
2026-07-03

days on market $140,000 Active 50 DOM
2026-07-02

days on market $140,000 Active 49 DOM
2026-07-01

days on market $140,000 Active 48 DOM
2026-06-30

days on market $140,000 Active 47 DOM
2026-06-29

days on market $140,000 Active 46 DOM
2026-06-28

days on market $140,000 Active 45 DOM
2026-06-28

days on market $140,000 Active 44 DOM
2026-06-27

days on market $140,000 Active 43 DOM
2026-06-25

days on market $140,000 Active 41 DOM
2026-06-23

days on market $140,000 Active 39 DOM
2026-06-22

days on market $140,000 Active 38 DOM
2026-06-18

days on market $140,000 Active 35 DOM
2026-06-17

days on market $140,000 Active 34 DOM
2026-06-16

days on market $140,000 Active 33 DOM
2026-06-15

days on market $140,000 Active 32 DOM
2026-06-14

days on market $140,000 Active 30 DOM
2026-06-10

days on market $140,000 Active 27 DOM
2026-06-09

days on market $140,000 Active 26 DOM
2026-06-08

days on market $140,000 Active 25 DOM
2026-06-07

statusdays on market $140,000 Active 24 DOM
2026-06-03

days on market $140,000 Contingent 20 DOM
2026-06-02

days on market $140,000 Contingent 19 DOM

ⓘ Source: listings_history table (triggers on properties + properties_extension) + one-shot backfill from property_details.listing_events for pre-trigger history.

Climate risk First Street

🌊 Flood 1/10 Low FEMA zone X (unshaded) · 0% chance over 30 yrs
🔥 Wildfire 1/10 Low
🌡 Heat 6/10 Major 7 d/yr ≥106°F today · 19 d/yr by 30 yrs out
💨 Wind 4/10 Moderate 19% chance of damaging wind over 30 yrs
🫁 Air quality 2/10 Low 0 unhealthy d/yr today · 2 by 30 yrs out

Nearby sold comps map

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Walkable amenities ~0.75 mi

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Taxation est. · year 1

Rental income: $14,711
− Mortgage interest: −$7,842
− Property taxes: −$2,100
− Insurance: −$700
− Repairs & maintenance: −$1,177
− Management: −$1,177
− HOA: −$2,364
− Depreciation: −$4,073
Taxable loss: −$4,722

Your marginal tax rate % combined federal + state — saved on this device

Est. tax savings @ 24.0%: +$1,133
After-tax cash flow: $-1,219/yr

For passive investors: Depreciation is non-cash, so a rental often shows a tax loss while cash-flowing — sheltering income. Rental losses are passive: they offset passive income freely, and up to $25,000/yr can offset ordinary (W-2) income if you actively participate and your MAGI is under $100k (phasing out to $0 by $150k); unused losses carry forward. On sale, claimed depreciation is recaptured at up to 25%, and gains may owe capital-gains tax (a 1031 exchange can defer both). Figures are a year-1 estimate at your 24.0% rate — not tax advice; consult a CPA.

Condition & rehab AI · 12 photos

Good 80/100 Cosmetic rehab Est. rehab $3,660–$10,980 screening

This well-maintained, updated condo is move-in ready with good condition and potential for further value enhancement through minor cosmetic upgrades.

Value-add opportunities

Both Painting exterior and interior walls — Enhances curb appeal and interior aesthetics ↑
Both Landscaping improvements — Enhances curb appeal and adds value ↑
Both New flooring in bathrooms — Improves aesthetics and functionality ↑
Both New kitchen appliances — Modernizes the kitchen and adds value ↑

ⓘ Rehab cost is a screening estimate — Cosmetic scope × the home's square footage at US $/sqft rules of thumb (the same model as the Flip Finder). Get contractor quotes + a written scope before underwriting.

D Composite school gradezoned avg 58/100

Zoned Schools

Elementary Midtown Elementary School B AL #46/627 Nat'l #5,891/41,679 Middle Discovery Middle School B AL #13/257 Nat'l #2,146/14,009 High Bob Jones High School D+ AL #11/305 Nat'l #5,016/17,239

Schools (NCES district)

District: Madison City
NCES district ID: 0100008
Math proficiency: 51% ▼ -25.00%
Reading proficiency: 71% ▼ -2.00%
Median HH income: $89,091
Composite: 55.56/100
National rank: #1238
State rank: #4 of 129 in AL

B Composite livability gradescore 76/100

Livability — Madison

Score: 76/100
State rank: #12
US rank: #3280

Category grades

Amenities F Commute F Cost of living B Crime B+ Employment A+ Housing A+ Health & safety B- User ratings A-

Schools grade is shown separately in the Schools card above.

Census & demographics

Census place: Madison, AL
County: Madison County · 392,086 people
City population: 93,742
Metro: Huntsville, AL
Population (ZIP): 50,266
Household income: $117,380
Rent vs Own: 30.8% rent · 69.2% own
Severe rent burden: 6% of renters

Population outlook (Madison County) Hauer SSP2

Today (2025): 392,086 people
By 2030: 409,788 · +4.5%
By 2040: 440,557 · +12.4%
By 2050: 460,990 · +17.6%
By 2075: 502,872 · +28.3%
By 2100: 513,623 · +31.0%

Race, ethnicity, and origin ACS 2023

Neighborhood character: Predominantly White (68%)
Race & ethnicity: White 68% Black 14% Hispanic / Latino 8% Asian 7% Two or more races 7%
Hispanic origin (detail): Mexican 3% Puerto Rican 2%
Common ancestry: Slovak 3% Italian 2% Lithuanian 2%
Foreign-born: 9% · Canada, South Korea, Vietnam
Languages at home: 87% English-only · Spanish 5% Other Asian/Pacific 2% Chinese 1%

Political lean MEDSL · Madison

2024 margin: Lean R (+9.0) · D 44.7% · R 53.7% · Other 1.6%
2008→2024 swing: +6.0pp toward D · 2008: -14.9pp · 2024: -9.0pp
All cycles: 2024: R+9.0 2020: R+8.0 2016: R+16.8 2012: R+18.7 2008: R+14.9

Not yet ingested

Civics: —

Market trends

HPI YoY: ▲ 14.46%
Current HPI: 355.2784
Rent YoY: ▲ 1.58%
Metro: Huntsville, AL
State GDP YoY: ▲ 2.94%
F500 in state: 4

Industry mix (Fortune 500 HQ in AL)

Industry	F500 HQs	Revenue
Financial Services	1	$8B
#317 Regions Financial Birmingham $8.2B
Healthcare	1	$5B
#300 Encompass Health Birmingham $5.3B

Price history

3 events — show timeline

2026-06-05 Relisted — VMLS
2026-05-30 Contingent — VMLS
2026-05-14 Listed $140,000 VMLS

Cash-flow waterfall

monthly

Sold comps — $/sqft

last 12 mo · ≤1 mi

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