196 Cottonwood Rd

Louisa, KY 41230

$119,500D

2 bd · 1.0 ba · 672 sqft · Built 2001 · Other · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $814/mo
• Mortgage (P&I): −$627
• Tax + insurance: −$88
• HOA: −$0
• Vac / Maint / Mgmt: −$171
• Net cashflow: $-71/mo
• Annual: $-854/yr
• Cap rate: 5.58%
• Cash-on-cash: -2.55%
• DSCR: 0.89
• 1% rule: 0.68%
• Cash to close: $33,460

Investor read

• This is a 2-bed/1.0-bath other listed at $120k.
• At list price, monthly cash flow is $-71 ($-854/yr) — negative.
• To cash-flow at today's rent, offer at most $107k (10.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $81k (31.9% below list).
• It's been on market 66 days — a 6% lower offer ($112k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $81k (31.9% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($826 loan paydown + $9k appreciation (7.2% local appreciation)).
• Location reads 61/100 on livability (#381 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, crime A, housing B; Watch: amenities F, commute F, employment F.
• Lawrence County (town): math 23% / reading 42% proficiency, ranked #95 of 165 in KY (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Louisa East Elementary School (math 24% / reading 44%, grade F, #329 of 676 statewide, top 49%, 491 students, 62% FRL); Louisa Middle School (math 22% / reading 43%, grade F, #116 of 217 statewide, top 55%, 457 students, 67% FRL); Lawrence County High School (math 32% / reading 47%, grade F, #40 of 254 statewide, top 19%, 738 students, 63% FRL).
• Market conditions: 64 active listings in the ZIP.
• Lawrence County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $36k; list at $120k implies a 227% gain — meaningful room to come down on a strong offer.
• At projected returns (7.2% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.6% vs local median 4.0% in Louisa — 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 66 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• 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?
• 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.
• 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.