8809 Valleybrook Rd

Birmingham, AL 35206

$194,900D

4 bd · 2.5 ba · 2,600 sqft · Built 1959 · SingleFamily · Active · 71 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,508/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$254
• HOA: −$0
• Vac / Maint / Mgmt: −$317
• Net cashflow: $-85/mo
• Annual: $-1,022/yr
• Cap rate: 5.77%
• Cash-on-cash: -1.87%
• DSCR: 0.92
• 1% rule: 0.77%
• Cash to close: $54,572

Investor read

• This is a 4-bed/2.5-bath single-family listed at $195k.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $180k (7.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $151k (22.6% below list).
• It's been on market 71 days — a 6% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $151k (22.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#78 in AL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities C-, schools F, crime F.
• Birmingham City (urban): math 4% / reading 20% proficiency, ranked #116 of 129 in AL (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.8%/yr); 130 active listings in the ZIP; 2 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 8y ago; this cycle's ask has dropped $35k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $136k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 43% of the median local income ($43k/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 71 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• Built in 1959 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?