1863 Mott Dr N

Mobile, AL 36617

$196,500D+

4 bd · 1.0 ba · 1,632 sqft · Built 1983 · SingleFamily · Pending · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,466/mo
• Mortgage (P&I): −$1,030
• Tax + insurance: −$122
• HOA: −$0
• Vac / Maint / Mgmt: −$308
• Net cashflow: $6/mo
• Annual: $71/yr
• Cap rate: 6.33%
• Cash-on-cash: 0.13%
• DSCR: 1.01
• 1% rule: 0.75%
• Cash to close: $55,020

Investor read

• This is a 4-bed/1.0-bath single-family listed at $196k.
• At list price, monthly cash flow is $6 ($71/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $147k (25.4% below list).
• It's been on market 56 days — a 3% lower offer ($191k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $147k (25.4% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($1k loan paydown + $9k appreciation (4.8% local appreciation)).
• Location reads 75/100 on livability (#20 in AL, #4,262 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D-, crime F, employment D-.
• Mobile County (urban): math 15% / reading 39% proficiency, ranked #81 of 129 in AL (top 63%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 40 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,678 units permitted in Mobile County in 2024 (264 in 5+ unit buildings).
• Mobile County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts; this cycle's ask has dropped $24k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $40k; list at $196k implies a 391% gain — meaningful room to come down on a strong offer.
• At projected returns (4.8% appreciation + 3.0% rent growth), your $55k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 4.9% in Mobile — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

Questions for listing agent

• It's been on market 56 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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.
• 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.