1949 Shady Grove Rd

Gatlinburg, TN 37876

$449,999D-

3 bd · 2.0 ba · 1,850 sqft · Built 2000 · SingleFamily · Active · 119 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,203/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$463
• Net cashflow: $-1,370/mo
• Annual: $-16,435/yr
• Cap rate: 2.64%
• Cash-on-cash: -13.04%
• DSCR: 0.42
• 1% rule: 0.49%
• Cash to close: $126,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $450k.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative.
• To cash-flow at today's rent, offer at most $252k (44.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $220k (51.0% below list).
• It's been on market 119 days — a 9% lower offer ($409k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $220k (51.0% below list) — sets the bar for 1% rule.
• In year one you build about $48k of equity ($3k loan paydown + $45k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#27 in TN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A; Watch: schools D-, crime F, amenities F.
• Sevier County (rural): math 31% / reading 28% proficiency, ranked #62 of 139 in TN (top 45%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents soft (-2.6%/yr); 1127 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,594 units permitted in Sevier County in 2024 (456 in 5+ unit buildings).
• Sevier County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 14y ago; this cycle's ask has dropped $50k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $340k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$77k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.6% vs local median 1.3% in Gatlinburg — 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 $2,203/mo this rent would consume 45% of the median local household income ($58k/yr) (locally 611% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 119 days. Have you received any prior offers? Is the seller open to a 51% 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.