2704 Lantern Walk SE

Huntsville, AL 35803

$625,000C+

None bd · 8.0 ba · 4,538 sqft · Built 1984 · MultiFamily · Active · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,531/mo
• Mortgage (P&I): −$3,278
• Tax + insurance: −$659
• HOA: −$0
• Vac / Maint / Mgmt: −$1,582
• Net cashflow: $2,013/mo
• Annual: $24,154/yr
• Cap rate: 10.16%
• Cash-on-cash: 13.80%
• DSCR: 1.61
• 1% rule: 1.20%
• Cash to close: $175,000

Investor read

• This is a ?-bed/8.0-bath multifamily listed at $625k.
• At list price, monthly cash flow is $2k ($24k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $625k).
• It's been on market 28 days — a 2% lower offer ($616k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $616k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Challenger Elementary School (math 30% / reading 53%, grade F, #232 of 627 statewide, top 37%, 503 students, 43% FRL); Challenger Middle School (math 19% / reading 55%, grade F, #73 of 257 statewide, top 29%, 438 students, 44% FRL); Virgil Grissom High School (math 34% / reading 40%, grade F, #39 of 305 statewide, top 13%, 1,974 students, 43% FRL) — zoned schools at 43% FRL track the district average.
• Market conditions: Rents rising (+3.7%/yr); 280 active listings in the ZIP; solid renter incomes; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 14y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $334k; list at $625k implies a 87% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.7% rent growth), your $175k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.2% vs local median 3.8% in Huntsville — 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.
• At $7,531/mo this rent would consume 90% of the median local household income ($101k/yr) (locally 411% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.