605 Hill Ave

Muscle Shoals, AL 35661

$129,900D

3 bd · 1.0 ba · 936 sqft · Built 1958 · SingleFamily · Active · 483 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $899/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$84
• HOA: −$0
• Vac / Maint / Mgmt: −$189
• Net cashflow: $-55/mo
• Annual: $-655/yr
• Cap rate: 5.79%
• Cash-on-cash: -1.80%
• DSCR: 0.92
• 1% rule: 0.69%
• Cash to close: $36,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $-55 ($-655/yr) — negative.
• To cash-flow at today's rent, offer at most $120k (7.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $90k (30.8% below list).
• It's been on market 483 days — a 12% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $90k (30.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#68 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A; Watch: amenities F, commute F.
• Muscle Shoals City (urban): math 42% / reading 60% proficiency, ranked #11 of 129 in AL (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Mcbride Elementary School (math 46% / reading 67%, grade C+, #82 of 627 statewide, top 13%, 614 students, 47% FRL); Muscle Shoals Middle School (math 37% / reading 59%, grade C-, #29 of 257 statewide, top 12%, 648 students, 48% FRL); Muscle Shoals High School (math 47% / reading 42%, grade F, #22 of 305 statewide, top 8%, 853 students, 40% FRL) — zoned schools average 45% FRL vs 25% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 255 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 91 units permitted in Colbert County in 2024 (0 in 5+ unit buildings).
• Colbert County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 3y ago 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.
• 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 5.8% vs local median 2.6% in Muscle Shoals — 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

• 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?
• It's been on market 483 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1958 — 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.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.