PAYTON Plan

Sanford, NC 27332

$233,990D+

3 bd · 2.5 ba · 1,614 sqft · Built — · Townhouse · Active · 170 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,087/mo
• Mortgage (P&I): −$1,234
• Tax + insurance: −$392
• HOA: −$0
• Vac / Maint / Mgmt: −$438
• Net cashflow: $23/mo
• Annual: $276/yr
• Cap rate: 6.41%
• Cash-on-cash: 0.42%
• DSCR: 1.02
• 1% rule: 0.89%
• Cash to close: $65,866

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $234k. Condition is rated excellent.
• At list price, monthly cash flow is $23 ($276/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 $209k (10.8% below list).
• It's been on market 170 days — a 12% lower offer ($206k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $206k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#92 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, crime D-, commute F.
• Lee County Schools (rural): math 31% / reading 39% proficiency, ranked #131 of 178 in NC (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Tramway Elementary (math 45% / reading 47%, grade D-, #551 of 1,410 statewide, top 40%, 545 students, 47% FRL); East Lee Middle (math 21% / reading 37%, grade F, #350 of 475 statewide, top 74%, 531 students, 71% FRL); Lee County High (math 39% / reading 44%, grade F, #381 of 535 statewide, top 72%, 1,508 students, 60% FRL) — zoned schools at 59% FRL track the district average.
• Market conditions: Rents rising fast (+4.9%/yr); 838 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 602 units permitted in Lee County in 2024 (0 in 5+ unit buildings).
• Lee County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: major wind risk, 60% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.8% in Sanford — 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.
• This rent runs 32% of the median local income ($78k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 170 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 D 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.
• 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.