8562 Fernwood Loop N

Semmes, AL 36575

$320,000D+

4 bd · 3.0 ba · 2,622 sqft · Built 2015 · SingleFamily · Pending · 168 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,595/mo
• Mortgage (P&I): −$1,678
• Tax + insurance: −$268
• HOA: −$0
• Vac / Maint / Mgmt: −$545
• Net cashflow: $104/mo
• Annual: $1,243/yr
• Cap rate: 6.68%
• Cash-on-cash: 1.39%
• DSCR: 1.06
• 1% rule: 0.81%
• Cash to close: $89,600

Investor read

• This is a 4-bed/3.0-bath single-family listed at $320k.
• At list price, monthly cash flow is $104 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $260k (18.9% below list).
• It's been on market 168 days — a 12% lower offer ($282k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $260k (18.9% 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 $10k 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: crime F, amenities F, commute 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.
• Zoned schools: Allentown Elementary School (math 31% / reading 59%, grade D-, #169 of 627 statewide, top 27%, 776 students, 53% FRL); Semmes Middle School (math 8% / reading 35%, grade F, #185 of 257 statewide, top 73%, 1,318 students, 68% FRL); Mary G Montgomery High School (math 13% / reading 18%, grade F, #211 of 305 statewide, top 69%, 1,965 students, 53% FRL).
• Market conditions: 185 active listings in the ZIP; 1 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.7% 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

• It's been on market 168 days. Have you received any prior offers? Is the seller open to a 19% 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?
• 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.