507 N 2nd St

Central City, KY 42330

$70,000C-

2 bd · 1.0 ba · 1,040 sqft · Built 1950 · Other · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $650/mo
• Mortgage (P&I): −$367
• Tax + insurance: −$43
• HOA: −$0
• Vac / Maint / Mgmt: −$136
• Net cashflow: $103/mo
• Annual: $1,240/yr
• Cap rate: 8.06%
• Cash-on-cash: 6.33%
• DSCR: 1.28
• 1% rule: 0.93%
• Cash to close: $19,600

Investor read

• This is a 2-bed/1.0-bath other listed at $70k.
• At list price, monthly cash flow is $103 ($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 $65k (7.1% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $65k (7.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $484 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#238 in KY) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Muhlenberg County (rural): math 24% / reading 37% proficiency, ranked #104 of 165 in KY (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Central City Elementary (math 22% / reading 32%, grade F, #434 of 676 statewide, top 69%, 414 students, 73% FRL); Muhlenberg County High School (math 24% / reading 32%, grade F, #151 of 254 statewide, top 61%, 1,146 students, 53% FRL).
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 40 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 5 units permitted in Muhlenberg County in 2024 (0 in 5+ unit buildings).
• Muhlenberg County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $18k; list at $70k implies a 289% gain — meaningful room to come down on a strong offer.
• 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 8.1% vs local median 4.0% in Central City — 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

• Built in 1950 — 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.
• 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?
• 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.