2008 3rd Ave N Unit 5C

Birmingham, AL 35203

$219,000D

2 bd · 1.0 ba · 1,119 sqft · Built 1925 · Condo · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,240/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$223
• HOA: −$573
• Vac / Maint / Mgmt: −$470
• Net cashflow: $-176/mo
• Annual: $-2,106/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.43%
• DSCR: 0.85
• 1% rule: 1.02%
• Cash to close: $61,320

Investor read

• This is a 2-bed/1.0-bath condo listed at $219k.
• At list price, monthly cash flow is $-176 ($-2k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $219k).
• It's been on market 56 days — a 3% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $212k (3.0% below list) — sets the bar for market timing.
• In year one you build about $817 of equity ($2k loan paydown + $-697 appreciation (-0.3% local appreciation)).
• Location reads 67/100 on livability (#78 in AL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities C-, schools F, crime F.
• Birmingham City (urban): math 4% / reading 20% proficiency, ranked #116 of 129 in AL (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: HOA is 26% of rent; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 44 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 2,114 units permitted in Jefferson County in 2024 (556 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 4y 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 $180k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At $2,240/mo this rent would consume 57% of the median local household income ($47k/yr) (locally 344% 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 56 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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?