2861 Summit Dr W

Semmes, AL 36618

$167,900D-

2 bd · 2.0 ba · 1,152 sqft · Built 1990 · SingleFamily · Active · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,274/mo
• Mortgage (P&I): −$880
• Tax + insurance: −$180
• HOA: −$0
• Vac / Maint / Mgmt: −$268
• Net cashflow: $-54/mo
• Annual: $-644/yr
• Cap rate: 6.38%
• Cash-on-cash: 0.33%
• DSCR: 1.01
• 1% rule: 0.76%
• Cash to close: $47,012

Investor read

• This is a 2-bed/2.0-bath single-family listed at $168k.
• At list price, monthly cash flow is $-54 ($-644/yr) — negative.
• To cash-flow at today's rent, offer at most $158k (5.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $127k (24.1% below list).
• It's been on market 105 days — a 9% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (24.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#311 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools D-, crime F, amenities F.
• Mobile County (urban): math 15% / reading 39% proficiency, ranked #81 of 129 in AL (top 63%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 99 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,678 units permitted in Mobile County in 2024 (264 in 5+ unit buildings).
• Mobile County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 2y 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.
• Climate carrying-cost: severe flood risk; severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 5.3% in Semmes — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 105 days. Have you received any prior offers? Is the seller open to a 24% 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?
• 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 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?