135 Wear Dr

Underwood-Petersville, AL 35633

$188,600D+

4 bd · 2.0 ba · 2,310 sqft · Built 1963 · SingleFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,454/mo
• Mortgage (P&I): −$989
• Tax + insurance: −$218
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $-59/mo
• Annual: $-707/yr
• Cap rate: 6.34%
• Cash-on-cash: 0.17%
• DSCR: 1.01
• 1% rule: 0.77%
• Cash to close: $52,808

Investor read

• This is a 4-bed/2.0-bath single-family listed at $189k.
• At list price, monthly cash flow is $-59 ($-707/yr) — negative.
• To cash-flow at today's rent, offer at most $178k (5.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $145k (22.9% below list).
• It's been on market 17 days — a 2% lower offer ($186k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $145k (22.9% 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 $6k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Lauderdale County (rural): math 19% / reading 46% proficiency, ranked #53 of 129 in AL (top 41%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Underwood Elementary School (math 12% / reading 42%, grade F, #392 of 627 statewide, top 65%, 325 students, 58% FRL); Lauderdale County High School (math 23% / reading 41%, grade F, #59 of 305 statewide, top 21%, 543 students, 51% FRL) — zoned schools average 54% FRL vs 37% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 184 active listings in the ZIP; 164 units permitted in Lauderdale County in 2024 (72 in 5+ unit buildings).
• Climate carrying-cost: severe flood risk; moderate wind risk, 23% 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 6.3% vs local median 3.3% in Underwood-Petersville — 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

• 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?
• Built in 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.