Overton Plan

Madison, AL 35758

$420,599F

5 bd · 2.5 ba · 2,682 sqft · Built — · SingleFamily · Active · 335 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,097/mo
• Mortgage (P&I): −$3,921
• Tax + insurance: −$1,246
• HOA: −$0
• Vac / Maint / Mgmt: −$650
• Net cashflow: $-2,720/mo
• Annual: $-32,644/yr
• Cap rate: 1.93%
• Cash-on-cash: -15.59%
• DSCR: 0.31
• 1% rule: 0.41%
• Cash to close: $209,352

Investor read

• This is a 5-bed/2.5-bath single-family listed at $421k.
• At list price, monthly cash flow is $-3k ($-33k/yr) — negative.
• To cash-flow at today's rent, offer at most $354k (15.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $310k (26.4% below list).
• It's been on market 335 days — a 12% lower offer ($370k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $310k (26.4% below list) — sets the bar for 1% rule.
• In year one you build about $80k of equity ($5k loan paydown + $75k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#12 in AL, #3,280 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, schools A; Watch: amenities F, commute F.
• Madison City (suburban): math 51% / reading 71% proficiency, ranked #4 of 129 in AL (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Watch-outs: property tax is 2.7% of price.
• Market conditions: Rents rising (+1.6%/yr); 382 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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.
• 2 sale attempts 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.
• By year 2, paydown + projected appreciation supports a ~$128k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 1.9% vs local median 2.6% in Madison — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 32% of the median local income ($117k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 335 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.