2755 Marcelus Dr

Mobile, AL 36606

$210,000D

3 bd · 2.0 ba · 1,694 sqft · Built 1958 · SingleFamily · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,532/mo
• Mortgage (P&I): −$1,101
• Tax + insurance: −$225
• HOA: −$0
• Vac / Maint / Mgmt: −$322
• Net cashflow: $-116/mo
• Annual: $-1,389/yr
• Cap rate: 6.01%
• Cash-on-cash: -1.01%
• DSCR: 0.96
• 1% rule: 0.73%
• Cash to close: $58,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $210k.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $190k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (27.1% below list).
• It's been on market 28 days — a 2% lower offer ($207k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $153k (27.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#20 in AL, #4,262 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Mobile County (urban): math 15% / reading 39% proficiency, ranked #81 of 129 in AL (top 63%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Lillie B Williamson High School (math 2% / reading 12%, grade F, #273 of 305 statewide, top 89%, 956 students, 94% FRL) — zoned schools average 94% FRL vs 67% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 7% at this address vs 27% district-wide (-20 pts) — the specific schools serving this property underperform the Mobile County average; the district grade overstates school quality for this exact location.
• Watch-outs: flood insurance adds $66/mo; built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 175 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 41% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,678 units permitted in Mobile County in 2024 (264 in 5+ unit buildings).
• Mobile County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: major flood risk; 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 6.0% vs local median 4.9% in Mobile — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 36% of the median local income ($51k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1958 — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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?
• 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.