RC Elmstead Plan

Bentonville, AR 72713

$264,000D

3 bd · 3.0 ba · 1,430 sqft · Built — · Townhouse · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,784/mo
• Mortgage (P&I): −$1,260
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$375
• Net cashflow: $-251/mo
• Annual: $-3,012/yr
• Cap rate: 5.04%
• Cash-on-cash: -4.48%
• DSCR: 0.80
• 1% rule: 0.74%
• Cash to close: $67,267

Investor read

• This is a 3-bed/3.0-bath townhouse listed at $264k.
• At list price, monthly cash flow is $-251 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (22.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $178k (32.4% below list).
• It's been on market 56 days — a 3% lower offer ($256k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $178k (32.4% below list) — sets the bar for 1% rule.
• In year one you build about $26k of equity ($2k loan paydown + $24k appreciation (10.0% local appreciation)).
• Location reads 83/100 on livability (#2 in AR, #864 nationally) — a professional / high-income tenant draw. Strengths: employment A+, housing A+, health & safety A+; Watch: amenities F.
• Bentonville School District (urban): math 59% / reading 59% proficiency, ranked #3 of 238 in AR (top 1%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents flat; 710 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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 ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.0% vs local median 2.6% in Bentonville — 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 is only 18% of the median local income ($120k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 56 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.
• 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.