3504 James Phillips Way

Gatlinburg, TN 37876

$375,000D

3 bd · 2.0 ba · 1,516 sqft · Built 1995 · SingleFamily · Active · 364 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,233/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$625
• HOA: −$0
• Vac / Maint / Mgmt: −$469
• Net cashflow: $-827/mo
• Annual: $-9,930/yr
• Cap rate: 3.64%
• Cash-on-cash: -9.46%
• DSCR: 0.58
• 1% rule: 0.60%
• Cash to close: $105,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $375k.
• At list price, monthly cash flow is $-827 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $255k (31.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $223k (40.5% below list).
• It's been on market 364 days — a 12% lower offer ($330k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $223k (40.5% below list) — sets the bar for 1% rule.
• In year one you build about $40k of equity ($3k loan paydown + $38k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#27 in TN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A; Watch: crime F, amenities F, employment D-.
• Sevier County (rural): math 31% / reading 28% proficiency, ranked #62 of 139 in TN (top 45%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: New Center Elementary (math 32% / reading 28%, grade F, #415 of 952 statewide, top 44%, 855 students, 0% FRL); Seymour Junior High (math 40% / reading 30%, grade F, #65 of 333 statewide, top 20%, 766 students, 0% FRL); Sevier County High School (math 20% / reading 38%, grade F, #92 of 332 statewide, top 28%, 1,248 students, 0% FRL) — zoned schools average 0% FRL vs 52% district-wide (52 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents soft (-2.6%/yr); 1142 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,594 units permitted in Sevier County in 2024 (456 in 5+ unit buildings).
• Sevier County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $150k; list at $375k implies a 150% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$64k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.6% vs local median 1.2% in Gatlinburg — 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 $2,233/mo this rent would consume 46% of the median local household income ($58k/yr) (locally 611% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 364 days. Have you received any prior offers? Is the seller open to a 40% concession, seller financing, or rate buy-down credit?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.