108 S 72nd St

Birmingham, AL 35206

$35,000B-

3 bd · 2.0 ba · 1,600 sqft · Built 1933 · SingleFamily · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,196/mo
• Mortgage (P&I): −$184
• Tax + insurance: −$58
• HOA: −$0
• Vac / Maint / Mgmt: −$251
• Net cashflow: $703/mo
• Annual: $8,439/yr
• Cap rate: 30.40%
• Cash-on-cash: 86.11%
• DSCR: 4.83
• 1% rule: 3.42%
• Cash to close: $9,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $35k. Condition is rated poor.
• At list price, monthly cash flow is $703 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $35k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $242 of loan paydown is wiped out by about $1k 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-, crime F, employment 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.
• Zoned schools: Barrett Elementary School (math 2% / reading 8%, grade F, #618 of 627 statewide, top 100%, 405 students, 88% FRL); Woodlawn High Schoolmagnet (math 2% / reading 2%, grade F, #291 of 305 statewide, top 100%, 738 students, 91% FRL).
• Watch-outs: built in 1933 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.8%/yr); 130 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $10k cash investment doubles in ~2 years — after that, you're playing with house money.
• 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 30.4% vs local median 6.2% in Birmingham — 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.
• This rent runs 34% of the median local income ($43k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1933 — 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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Peeling paint and worn condition
• Major: interior walls — Peeling paint and debris
• Major: ceiling — Damaged and debris
• Major: flooring — Worn carpet and debris
• Major: kitchen ceiling — Damaged and debris
• Major: bathroom ceiling — Damaged and debris