178 Davis St

Pea Ridge, AR 72751

$274,683D

3 bd · 1.5 ba · 1,501 sqft · Built 1979 · SingleFamily · Pending · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,834/mo
• Mortgage (P&I): −$1,440
• Tax + insurance: −$311
• HOA: −$0
• Vac / Maint / Mgmt: −$385
• Net cashflow: $-303/mo
• Annual: $-3,631/yr
• Cap rate: 4.97%
• Cash-on-cash: -4.72%
• DSCR: 0.79
• 1% rule: 0.67%
• Cash to close: $76,911

Investor read

• This is a 3-bed/1.5-bath single-family listed at $275k.
• At list price, monthly cash flow is $-303 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $221k (19.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $183k (33.2% below list).
• It's been on market 48 days — a 3% lower offer ($266k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $183k (33.2% below list) — sets the bar for 1% rule.
• In year one you build about $22k of equity ($2k loan paydown + $21k 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; 33 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 42% 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.
• 3 sale attempts since 2y 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.
• By year 2, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.0% vs local median 3.4% in Pea Ridge — 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 48 days. Have you received any prior offers? Is the seller open to a 33% concession, seller financing, or rate buy-down credit?
• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.