2640 Tates Creek Rd

Lexington-Fayette, KY 40475

$150,000D+

3 bd · 2.0 ba · 1,084 sqft · Built 1956 · SingleFamily · Active · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,460/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$184
• HOA: −$0
• Vac / Maint / Mgmt: −$307
• Net cashflow: $183/mo
• Annual: $2,195/yr
• Cap rate: 8.29%
• Cash-on-cash: 7.13%
• DSCR: 1.32
• 1% rule: 0.97%
• Cash to close: $42,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $183 ($2k/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 $146k (2.7% below list).
• It's been on market 32 days — a 3% lower offer ($146k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $146k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Madison County (town): math 31% / reading 47% proficiency, ranked #35 of 165 in KY (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: White Hall Elementary School (math 47% / reading 57%, grade C-, #82 of 676 statewide, top 13%, 379 students, 57% FRL); Madison Middle School (math 24% / reading 43%, grade F, #105 of 217 statewide, top 51%, 670 students, 49% FRL); Madison Central High School (math 29% / reading 44%, grade F, #70 of 254 statewide, top 27%, 2,226 students, 47% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.8%/yr); 487 active listings in the ZIP; 453 units permitted in Madison County in 2024 (64 in 5+ unit buildings).
• Madison County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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.
• Current owner paid $62k; list at $150k implies a 140% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.3% vs local median 3.8% in Lexington-Fayette — 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 32 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1956 — 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.
• 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.