Foster II Plan

Huntsville, AL 35811

$252,890F

3 bd · 2.0 ba · 1,355 sqft · Built — · SingleFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,857/mo
• Mortgage (P&I): −$1,587
• Tax + insurance: −$504
• HOA: −$0
• Vac / Maint / Mgmt: −$390
• Net cashflow: $-625/mo
• Annual: $-7,495/yr
• Cap rate: 3.82%
• Cash-on-cash: -8.84%
• DSCR: 0.61
• 1% rule: 0.61%
• Cash to close: $84,743

Investor read

• This is a 3-bed/2.0-bath single-family listed at $253k.
• At list price, monthly cash flow is $-625 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $212k (16.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $186k (26.6% below list).
• It's been on market 17 days — a 2% lower offer ($249k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $186k (26.6% 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 $9k 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.
• Madison County (rural): math 27% / reading 56% proficiency, ranked #19 of 129 in AL (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mt Carmel Elementary School (math 37% / reading 72%, grade C, #87 of 627 statewide, top 15%, 646 students, 34% FRL); Buckhorn Middle School (math 19% / reading 59%, grade F, #64 of 257 statewide, top 25%, 688 students, 38% FRL); Buckhorn High School (math 31% / reading 33%, grade F, #59 of 305 statewide, top 21%, 1,287 students, 34% FRL).
• Market conditions: Rents rising fast (+6.8%/yr); 570 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 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.

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?
• 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?
• 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.
• 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.