720 Cross Creek Trl

Pelham, AL 35124

$90,000B

3 bd · 2.0 ba · 1,669 sqft · Built 1972 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,728/mo
• Mortgage (P&I): −$472
• Tax + insurance: −$612
• HOA: −$0
• Vac / Maint / Mgmt: −$363
• Net cashflow: $281/mo
• Annual: $3,369/yr
• Cap rate: 16.18%
• Cash-on-cash: 35.29%
• DSCR: 2.57
• 1% rule: 1.92%
• Cash to close: $25,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $281 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $90k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#67 in AL) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: amenities F, commute F, health & safety F.
• Zoned schools: Pelham Park Middle School (math 19% / reading 58%, grade F, #66 of 257 statewide, top 26%, 808 students, 51% FRL); Pelham High School (math 26% / reading 38%, grade F, #59 of 305 statewide, top 21%, 1,080 students, 43% FRL).
• Watch-outs: flood insurance adds $460/mo.
• Market conditions: 192 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 987 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); major wind risk, 48% 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 16.2% vs local median 3.4% in Pelham — 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

• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?
• 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.