1605 Middle Gulf Dr #310

Sanibel, FL 33957

$1,265,000B-

2 bd · 2.0 ba · 1,641 sqft · Built 1981 · Condo · Pending · 101 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,980/mo
• Mortgage (P&I): −$6,634
• Tax + insurance: −$2,185
• HOA: −$2,300
• Vac / Maint / Mgmt: −$3,986
• Net cashflow: $3,876/mo
• Annual: $46,511/yr
• Cap rate: 10.37%
• Cash-on-cash: 14.58%
• DSCR: 1.65
• 1% rule: 1.50%
• Cash to close: $354,200

Investor read

• This is a 2-bed/2.0-bath condo listed at $1.26M.
• At list price, monthly cash flow is $4k ($47k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($19k rent vs $1.26M).
• It's been on market 101 days — a 9% lower offer ($1.15M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.15M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $38k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#541 in FL) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: housing D+, amenities F, commute F.
• Lee (suburban): math 47% / reading 50% proficiency, ranked #42 of 73 in FL (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 526 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 15,411 units permitted in Lee County in 2024 (4,686 in 5+ unit buildings).
• Lee County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $85k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $480k; list at $1.26M implies a 164% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $354k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.4% vs local median 3.8% in Sanibel — 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

• It's been on market 101 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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.