11036 Louis Dr SE

Huntsville, AL 35803

$260,000D

4 bd · 1.0 ba · 2,394 sqft · Built 1966 · SingleFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,043/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$373
• HOA: −$0
• Vac / Maint / Mgmt: −$429
• Net cashflow: $-122/mo
• Annual: $-1,462/yr
• Cap rate: 5.73%
• Cash-on-cash: -2.01%
• DSCR: 0.91
• 1% rule: 0.79%
• Cash to close: $72,800

Investor read

• This is a 4-bed/1.0-bath single-family listed at $260k.
• At list price, monthly cash flow is $-122 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $238k (8.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (21.4% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $204k (21.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Weatherly Heights Elementary School (math 27% / reading 62%, grade F, #171 of 627 statewide, top 31%, 481 students, 42% FRL); Mountain Gap Middle School (math 27% / reading 63%, grade D, #38 of 257 statewide, top 14%, 419 students, 44% FRL); Virgil Grissom High School (math 34% / reading 40%, grade F, #39 of 305 statewide, top 13%, 1,974 students, 43% FRL) — zoned schools at 43% FRL track the district average.
• Market conditions: Rents rising (+3.7%/yr); 280 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $190k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 3.8% in Huntsville — 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?
• Built in 1966 — 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.
• 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.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.