500 Burchwood Bay Rd

Hot Springs, AR 71913

$495,000D-

2 bd · 2.0 ba · 1,540 sqft · Built 1960 · MultiFamily · Active · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,556/mo
• Mortgage (P&I): −$2,596
• Tax + insurance: −$331
• HOA: −$0
• Vac / Maint / Mgmt: −$747
• Net cashflow: $-118/mo
• Annual: $-1,415/yr
• Cap rate: 6.01%
• Cash-on-cash: -1.02%
• DSCR: 0.95
• 1% rule: 0.72%
• Cash to close: $138,600

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $495k.
• At list price, monthly cash flow is $-118 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $474k (4.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $356k (28.2% below list).
• It's been on market 32 days — a 3% lower offer ($480k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $356k (28.2% 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 $15k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#140 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: crime F, amenities F, commute F.
• Hot Springs School District (urban): math 24% / reading 25% proficiency, ranked #195 of 238 in AR (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Hot Springs Junior Academy (math 20% / reading 29%, grade F, #166 of 201 statewide, top 84%, 815 students, 100% FRL, charter); Hot Springs World Class High School (math 12% / reading 24%, grade F, #252 of 292 statewide, top 87%, 739 students, 100% FRL, charter) — zoned schools average 100% FRL vs 72% district-wide (28 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+6.4%/yr); 981 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 117 units permitted in Garland County in 2024 (24 in 5+ unit buildings).
• Garland County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 7 sale attempts since 13y 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.
• Current owner paid $180k; list at $495k implies a 175% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 2.8% in Hot Springs — 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 $3,556/mo this rent would consume 76% of the median local household income ($56k/yr) (locally 1442% 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 32 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Built in 1960 — 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?
• 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.