Lily Plan

Montgomery, AL 36116

$250,200F

3 bd · 2.0 ba · 1,402 sqft · Built — · SingleFamily · Active · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,344/mo
• Mortgage (P&I): −$1,384
• Tax + insurance: −$440
• HOA: −$27
• Vac / Maint / Mgmt: −$282
• Net cashflow: $-789/mo
• Annual: $-9,464/yr
• Cap rate: 2.71%
• Cash-on-cash: -12.81%
• DSCR: 0.43
• 1% rule: 0.51%
• Cash to close: $73,885

Investor read

• This is a 3-bed/2.0-bath single-family listed at $250k. Condition is rated good.
• At list price, monthly cash flow is $-789 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $150k (40.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $134k (46.3% below list).
• It's been on market 102 days — a 9% lower offer ($228k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (46.3% 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 65/100 on livability (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, crime F, amenities D-.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Brewbaker Primary School (799 students, 78% FRL); Brewbaker Middle School (math 0% / reading 19%, grade F, #227 of 257 statewide, top 90%, 838 students, 91% FRL); Jefferson Davis High School (math 3% / reading 16%, grade F, #258 of 305 statewide, top 85%, 1,522 students, 83% FRL).
• Market conditions: Rents rising fast (+5.7%/yr); 361 active listings in the ZIP; 18 comparable units currently listed for rent nearby; rentals lingering (median 70d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: major wind risk, 77% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.7% vs local median 6.2% in Montgomery — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 102 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.