1605 Morning Sun Cir #1605

Meadowbrook, AL 35242

$175,000D

2 bd · 2.0 ba · 1,136 sqft · Built 1985 · Condo · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,525/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$292
• HOA: −$0
• Vac / Maint / Mgmt: −$320
• Net cashflow: $-4/mo
• Annual: $-54/yr
• Cap rate: 6.26%
• Cash-on-cash: -0.11%
• DSCR: 1.00
• 1% rule: 0.87%
• Cash to close: $49,000

Investor read

• This is a 2-bed/2.0-bath condo listed at $175k. Condition is rated good.
• At list price, monthly cash flow is $-4 ($-54/yr) — negative.
• To cash-flow at today's rent, offer at most $174k (0.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (12.8% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $153k (12.8% 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 $5k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#172 in AL) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Shelby County (suburban): math 30% / reading 58% proficiency, ranked #16 of 129 in AL (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Inverness Elementary School (math 47% / reading 72%, grade B-, #63 of 627 statewide, top 10%, 582 students, 29% FRL); Oak Mountain High School (math 52% / reading 52%, grade D+, #11 of 305 statewide, top 4%, 1,561 students, 22% FRL) — zoned schools at 26% FRL track the district average.
• Market conditions: Rents flat; 399 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 987 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 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 6.3% vs local median 4.0% in Meadowbrook — 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 is only 16% of the median local income ($117k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• 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?
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.