5057 Babb Ln

Pea Ridge, FL 32571

$250,000D

3 bd · 2.0 ba · 1,430 sqft · Built 1975 · SingleFamily · Active · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,044/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$259
• HOA: −$0
• Vac / Maint / Mgmt: −$429
• Net cashflow: $45/mo
• Annual: $535/yr
• Cap rate: 6.51%
• Cash-on-cash: 0.76%
• DSCR: 1.03
• 1% rule: 0.82%
• Cash to close: $70,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $250k.
• At list price, monthly cash flow is $45 ($535/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (18.3% below list).
• It's been on market 94 days — a 9% lower offer ($228k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (18.3% below list) — sets the bar for 1% rule.
• 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 69/100 on livability (#459 in FL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: amenities F, commute F, health & safety F.
• Santa Rosa (suburban): math 63% / reading 60% proficiency, ranked #8 of 73 in FL (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Pea Ridge Elementary School (math 57% / reading 55%, grade C+, #832 of 2,144 statewide, top 40%, 837 students, 60% FRL); Pace High School (math 63% / reading 62%, grade B-, #93 of 667 statewide, top 14%, 2,240 students, 34% FRL).
• Market conditions: Rents rising (+2.7%/yr); 674 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,983 units permitted in Santa Rosa County in 2024 (128 in 5+ unit buildings).
• Santa Rosa County population projected at +31% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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 $205k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 4.5% in Pea Ridge — 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

• It's been on market 94 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.