1100-2 Bungalow Plan

Centerton, AR 72713

$226,114D

2 bd · 2.5 ba · 1,093 sqft · Built — · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,576/mo
• Mortgage (P&I): −$1,186
• Tax + insurance: −$377
• HOA: −$0
• Vac / Maint / Mgmt: −$331
• Net cashflow: $-318/mo
• Annual: $-3,811/yr
• Cap rate: 4.61%
• Cash-on-cash: -6.02%
• DSCR: 0.73
• 1% rule: 0.70%
• Cash to close: $63,312

Investor read

• This is a 2-bed/2.5-bath single-family listed at $226k.
• At list price, monthly cash flow is $-318 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $180k (20.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $158k (30.3% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $158k (30.3% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($2k loan paydown + $23k appreciation (10.0% local appreciation)).
• Location reads 77/100 on livability (#11 in AR, #3,194 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, cost of living A+; Watch: amenities F, commute F.
• Bentonville School District (urban): math 59% / reading 59% proficiency, ranked #3 of 238 in AR (top 1%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents flat; 710 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 4,359 units permitted in Benton County in 2024 (402 in 5+ unit buildings).
• Benton County population projected at +56% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 2.9% in Centerton — 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 ($120k/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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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.