50 Yacht Cove Dr #327

Hilton Head Island, SC 29928

$435,000D-

3 bd · 3.5 ba · 1,453 sqft · Built 1987 · Condo · Active · 63 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,039/mo
• Mortgage (P&I): −$2,281
• Tax + insurance: −$711
• HOA: −$507
• Vac / Maint / Mgmt: −$848
• Net cashflow: $-308/mo
• Annual: $-3,697/yr
• Cap rate: 5.44%
• Cash-on-cash: -3.03%
• DSCR: 0.86
• 1% rule: 0.93%
• Cash to close: $121,800

Investor read

• This is a 3-bed/3.5-bath condo listed at $435k.
• At list price, monthly cash flow is $-308 ($-4k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $404k (7.1% below list).
• It's been on market 63 days — a 6% lower offer ($409k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $404k (7.1% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($3k loan paydown + $14k appreciation (3.2% local appreciation)).
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.2%/yr); 838 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y 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.
• By year 3, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.4% vs local median 3.0% in Hilton Head Island — 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 $4,039/mo this rent would consume 50% of the median local household income ($98k/yr) (locally 216% 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 63 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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?
• 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?