778 Big Cave Rd

Mount Vernon, KY 40460

$44,900F

3 bd · 2.0 ba · 1,696 sqft · Built 1981 · SingleFamily · Pending · 266 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,126/mo
• Mortgage (P&I): −$861
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$236
• Net cashflow: $-124/mo
• Annual: $-1,488/yr
• Cap rate: 5.39%
• Cash-on-cash: -3.24%
• DSCR: 0.86
• 1% rule: 0.69%
• Cash to close: $45,994

Investor read

• This is a 3-bed/2.0-bath single-family listed at $45k.
• At list price, monthly cash flow is $-124 ($-1k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• It's been on market 266 days — a 12% lower offer ($40k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $40k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#321 in KY) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+; Watch: housing C-, schools D+, amenities F.
• Rockcastle County (rural): math 23% / reading 40% proficiency, ranked #102 of 165 in KY (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 8 active listings in the ZIP.
• Rockcastle County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.9% in Mount Vernon — 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 266 days. Have you received any prior offers? Is the seller open to a 12% 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.