1264-1266 Dale Dr

Lexington-Fayette, KY 40517

$265,000C

6 bd · 1.0 ba · 782 sqft · Built 1989 · MultiFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,691/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$158
• HOA: −$0
• Vac / Maint / Mgmt: −$565
• Net cashflow: $578/mo
• Annual: $6,942/yr
• Cap rate: 8.91%
• Cash-on-cash: 9.36%
• DSCR: 1.42
• 1% rule: 1.02%
• Cash to close: $74,200

Investor read

• This is a 6-bed/1.0-bath multifamily listed at $265k.
• At list price, monthly cash flow is $578 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $265k).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Millcreek Elementary School (math 19% / reading 24%, grade F, #556 of 676 statewide, top 83%, 541 students, 68% FRL); Tates Creek Middle School (math 29% / reading 38%, grade F, #105 of 217 statewide, top 51%, 769 students, 58% FRL); Tates Creek High School (math 29% / reading 32%, grade F, #121 of 254 statewide, top 47%, 1,734 students, 52% FRL).
• Market conditions: Rents rising fast (+4.5%/yr); 103 active listings in the ZIP; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $74k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.9% vs local median 3.8% in Lexington-Fayette — 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.
• At $2,691/mo this rent would consume 60% of the median local household income ($54k/yr) (locally 2743% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.