506 Fayette St

Martinsville, VA 24112

$80,000B+

3 bd · 1.5 ba · 1,563 sqft · Built 1955 · Other · Active · 71 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,201/mo
• Mortgage (P&I): −$420
• Tax + insurance: −$90
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $439/mo
• Annual: $5,267/yr
• Cap rate: 12.88%
• Cash-on-cash: 23.51%
• DSCR: 2.05
• 1% rule: 1.50%
• Cash to close: $22,400

Investor read

• This is a 3-bed/1.5-bath other listed at $80k.
• At list price, monthly cash flow is $439 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $80k).
• It's been on market 71 days — a 6% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $553 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#231 in VA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, schools B; Watch: amenities F, commute F, employment D-.
• Martinsville City Public School District (town): math 29% / reading 53% proficiency, ranked #122 of 131 in VA (top 93%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 256 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 5 units permitted in Martinsville city in 2024 (5 in 5+ unit buildings).
• Martinsville County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts 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 $28k; list at $80k implies a 181% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.9% vs local median 5.9% in Martinsville — 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

• It's been on market 71 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.