2038 Montreat Cir Unit D

Vestavia Hills, AL 35216

$110,000C-

1 bd · 1.0 ba · 694 sqft · Built 1967 · Condo · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,106/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$232
• Net cashflow: $114/mo
• Annual: $1,366/yr
• Cap rate: 7.53%
• Cash-on-cash: 4.43%
• DSCR: 1.20
• 1% rule: 1.01%
• Cash to close: $30,800

Investor read

• This is a 1-bed/1.0-bath condo listed at $110k.
• At list price, monthly cash flow is $114 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $110k).
• It's been on market 17 days — a 2% lower offer ($108k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $108k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $761 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#2 in AL, #827 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, employment A+; Watch: amenities F, cost of living F.
• Vestavia Hills City (suburban): math 63% / reading 83% proficiency, ranked #2 of 129 in AL (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical; only 7% free/reduced lunch — higher-income household profile.
• Zoned schools: Vestavia Hills High School (math 71% / reading 69%, grade B+, #3 of 305 statewide, top 1%, 1,578 students, 10% FRL) — zoned schools at 10% FRL track the district average.
• Market conditions: Rents rising (+2.6%/yr); 135 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 57% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $60k; list at $110k implies a 83% gain — meaningful room to come down on a strong offer.
• Cap rate 7.5% vs local median 2.5% in Vestavia Hills — 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 18% of the median local income ($75k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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.
• 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.