405 Burch St

Hartselle, AL 35640

$120,000C+

2 bd · 1.0 ba · 1,073 sqft · Built 1948 · SingleFamily · Pending · 109 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,152/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$71
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $210/mo
• Annual: $2,514/yr
• Cap rate: 8.39%
• Cash-on-cash: 7.48%
• DSCR: 1.33
• 1% rule: 0.96%
• Cash to close: $33,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $210 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (4.0% below list).
• It's been on market 109 days — a 9% lower offer ($109k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#32 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Hartselle City (other): math 41% / reading 64% proficiency, ranked #10 of 129 in AL (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 193 active listings in the ZIP; 5 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; 231 units permitted in Morgan County in 2024 (0 in 5+ unit buildings).
• Morgan County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $20k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $60k; list at $120k implies a 100% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 4.0% in Hartselle — 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 109 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1948 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.