909 Avenue M

Birmingham, AL 35214

$35,000B

3 bd · 1.0 ba · 912 sqft · Built 1960 · SingleFamily · Pending · 222 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,101/mo
• Mortgage (P&I): −$184
• Tax + insurance: −$500
• HOA: −$0
• Vac / Maint / Mgmt: −$231
• Net cashflow: $186/mo
• Annual: $2,236/yr
• Cap rate: 27.30%
• Cash-on-cash: 75.04%
• DSCR: 4.34
• 1% rule: 3.15%
• Cash to close: $9,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $35k.
• At list price, monthly cash flow is $186 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $35k).
• It's been on market 222 days — a 12% lower offer ($31k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $31k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $242 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#78 in AL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities C-, crime F, employment F.
• Birmingham City (urban): math 4% / reading 20% proficiency, ranked #116 of 129 in AL (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Central Park Elementary School (math 0% / reading 12%, grade F, #616 of 627 statewide, top 98%, 447 students, 83% FRL) — zoned schools at 83% FRL track the district average.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents flat; 116 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 41% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $12k (26%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.7% rent growth), your $10k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 27.3% vs local median 6.2% in Birmingham — 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 222 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 F-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?
• 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.