1115 Mckenzie Ave

Panama City, FL 32401

$235,000D

2 bd · 1.0 ba · 1,304 sqft · Built 1940 · SingleFamily · Active · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,745/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$366
• Net cashflow: $-13/mo
• Annual: $-160/yr
• Cap rate: 6.22%
• Cash-on-cash: -0.24%
• DSCR: 0.99
• 1% rule: 0.74%
• Cash to close: $65,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $-13 ($-160/yr) — negative.
• To cash-flow at today's rent, offer at most $233k (1.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $175k (25.7% below list).
• It's been on market 18 days — a 2% lower offer ($231k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (25.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#350 in FL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Bay (suburban): math 51% / reading 51% proficiency, ranked #29 of 73 in FL (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Merriam Cherry Street Elementary (math 22% / reading 37%, grade F, #1,896 of 2,144 statewide, top 90%, 362 students, 72% FRL); Jinks Middle School (math 41% / reading 42%, grade F, #348 of 571 statewide, top 62%, 570 students, 70% FRL); Bay High School (math 37% / reading 34%, grade F, #367 of 667 statewide, top 57%, 1,255 students, 53% FRL) — zoned schools average 65% FRL vs 48% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 36% at this address vs 51% district-wide (-16 pts) — the specific schools serving this property underperform the Bay average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 262 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 2,473 units permitted in Bay County in 2024 (559 in 5+ unit buildings).
• Bay County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 25y 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 $98k; list at $235k implies a 140% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 4.7% in Panama City — 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

• 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?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.
• 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.