1200 Hybrid Plan

Pea Ridge, AR 72751

$273,535D

3 bd · 2.0 ba · 1,200 sqft · Built — · SingleFamily · Active · 187 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,829/mo
• Mortgage (P&I): −$1,434
• Tax + insurance: −$456
• HOA: −$0
• Vac / Maint / Mgmt: −$384
• Net cashflow: $-445/mo
• Annual: $-5,344/yr
• Cap rate: 4.34%
• Cash-on-cash: -6.98%
• DSCR: 0.69
• 1% rule: 0.67%
• Cash to close: $76,590

Investor read

• This is a 3-bed/2.0-bath single-family listed at $274k.
• At list price, monthly cash flow is $-445 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $209k (23.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $183k (33.1% below list).
• It's been on market 187 days — a 12% lower offer ($241k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $183k (33.1% below list) — sets the bar for 1% rule.
• In year one you build about $22k of equity ($2k loan paydown + $20k appreciation (7.5% local appreciation)).
• Location reads 67/100 on livability (#98 in AR) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, cost of living A-; Watch: amenities F, commute F.
• Pea Ridge School District (suburban): math 43% / reading 42% proficiency, ranked #43 of 238 in AR (top 18%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 423 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,359 units permitted in Benton County in 2024 (402 in 5+ unit buildings).
• Benton County population projected at +56% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.3% vs local median 3.4% in Pea Ridge — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 187 days. Have you received any prior offers? Is the seller open to a 33% 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.
• 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.