3944 Azalean Dr

Chattanooga, TN 37415

$260,000D-

2 bd · 2.5 ba · 1,296 sqft · Built 1955 · SingleFamily · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,597/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$216
• HOA: −$0
• Vac / Maint / Mgmt: −$335
• Net cashflow: $-318/mo
• Annual: $-3,814/yr
• Cap rate: 4.83%
• Cash-on-cash: -5.24%
• DSCR: 0.77
• 1% rule: 0.61%
• Cash to close: $72,800

Investor read

• This is a 2-bed/2.5-bath single-family listed at $260k.
• At list price, monthly cash flow is $-318 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (21.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $160k (38.6% below list).
• It's been on market 34 days — a 3% lower offer ($252k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $160k (38.6% 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 78/100 on livability (#3 in TN, #2,582 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D+, crime F.
• Hamilton County (urban): math 31% / reading 31% proficiency, ranked #42 of 139 in TN (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Dupont Elementary (math 27% / reading 22%, grade F, #546 of 952 statewide, top 61%, 233 students, 0% FRL); Hixson Middle School (math 27% / reading 20%, grade F, #162 of 333 statewide, top 50%, 607 students, 0% FRL); Hixson High School (math 22% / reading 32%, grade F, #104 of 332 statewide, top 33%, 935 students, 0% FRL) — zoned schools average 0% FRL vs 52% district-wide (52 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.9%/yr); 183 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 2,133 units permitted in Hamilton County in 2024 (405 in 5+ unit buildings).
• Hamilton County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $15k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $90k; list at $260k implies a 191% 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 4.8% vs local median 3.4% in Chattanooga — 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 34 days. Have you received any prior offers? Is the seller open to a 39% concession, seller financing, or rate buy-down credit?
• Built in 1955 — 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 F-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.