14840 US 25/70 Hwy

Hot Springs, NC 28753

$290,000D

3 bd · 1.0 ba · 1,068 sqft · Built 1949 · Other · Active · 158 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,884/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$236
• HOA: −$0
• Vac / Maint / Mgmt: −$396
• Net cashflow: $-269/mo
• Annual: $-3,226/yr
• Cap rate: 5.46%
• Cash-on-cash: -2.99%
• DSCR: 0.87
• 1% rule: 0.65%
• Cash to close: $81,200

Investor read

• This is a 3-bed/1.0-bath other listed at $290k.
• At list price, monthly cash flow is $-269 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $243k (16.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $188k (35.0% below list).
• It's been on market 158 days — a 12% lower offer ($255k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $188k (35.0% below list) — sets the bar for 1% rule.
• In year one you build about $31k of equity ($2k loan paydown + $29k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#288 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A-; Watch: crime D, amenities F, commute F.
• Madison County Schools (rural): math 51% / reading 56% proficiency, ranked #55 of 178 in NC (top 31%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Brush Creek Elementary (math 57% / reading 62%, grade B-, #205 of 1,410 statewide, top 16%, 333 students, 58% FRL); Madison Middle School (math 44% / reading 56%, grade C, #113 of 475 statewide, top 25%, 452 students, 57% FRL); Madison High School (math 57% / reading 52%, grade C-, #270 of 535 statewide, top 52%, 414 students, 48% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 140 active listings in the ZIP; 209 units permitted in Madison County in 2024 (5 in 5+ unit buildings).
• 4 sale attempts since 14y 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 $144k; list at $290k implies a 101% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$50k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk; major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 0.6% 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.

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 158 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• Built in 1949 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 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 D 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?