526 Pearson Cir

Broad Creek, NC 28570

$399,000B

3 bd · 3.0 ba · 2,089 sqft · Built 2005 · Other · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,400/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$271
• HOA: −$0
• Vac / Maint / Mgmt: −$2,604
• Net cashflow: $7,433/mo
• Annual: $89,196/yr
• Cap rate: 28.65%
• Cash-on-cash: 79.84%
• DSCR: 4.55
• 1% rule: 3.11%
• Cash to close: $111,720

Investor read

• This is a 3-bed/3.0-bath other listed at $399k.
• At list price, monthly cash flow is $7k ($89k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($12k rent vs $399k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#340 in NC) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety D-.
• Carteret County Public Schools (rural): math 59% / reading 61% proficiency, ranked #31 of 178 in NC (top 17%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Bogue Sound Elementary (math 63% / reading 63%, grade B, #168 of 1,410 statewide, top 12%, 467 students, 99% FRL); Broad Creek Middle (math 63% / reading 68%, grade A-, #28 of 475 statewide, top 6%, 710 students, 100% FRL); Croatan High (math 82% / reading 78%, grade A, #73 of 535 statewide, top 13%, 974 students, 26% FRL) — zoned schools average 75% FRL vs 39% district-wide (36 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 216 active listings in the ZIP; 935 units permitted in Carteret County in 2024 (360 in 5+ unit buildings).
• Carteret County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 22y 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.
• Current owner paid $270k; 48% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $112k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 28.6% vs local median 22.6% in Broad Creek — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $12,400/mo this rent would consume 212% of the median local household income ($70k/yr) (locally 461% 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.
• 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?
• 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.