2305 Lee High Dr

Huntsville, AL 35811

$169,000F

2 bd · 1.0 ba · 960 sqft · Built 1951 · SingleFamily · Pending · 204 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,262/mo
• Mortgage (P&I): −$886
• Tax + insurance: −$209
• HOA: −$0
• Vac / Maint / Mgmt: −$265
• Net cashflow: $-99/mo
• Annual: $-1,188/yr
• Cap rate: 6.06%
• Cash-on-cash: -0.83%
• DSCR: 0.96
• 1% rule: 0.75%
• Cash to close: $47,320

Investor read

• This is a 2-bed/1.0-bath single-family listed at $169k.
• At list price, monthly cash flow is $-99 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (10.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $126k (25.3% below list).
• It's been on market 204 days — a 12% lower offer ($149k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $126k (25.3% below list) — sets the bar for 1% rule.
• 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 82/100 on livability (#3 in AL, #1,082 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F.
• Huntsville City (urban): math 21% / reading 46% proficiency, ranked #48 of 129 in AL (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Martin Luther King Jr Elementary School (math 4% / reading 18%, grade F, #560 of 627 statewide, top 90%, 464 students, 89% FRL); Chapman Middle School (math 2% / reading 23%, grade F, #216 of 257 statewide, top 86%, 368 students, 88% FRL); Lee High School (math 2% / reading 17%, grade F, #252 of 305 statewide, top 84%, 840 students, 77% FRL) — zoned schools average 85% FRL vs 46% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 11% at this address vs 34% district-wide (-22 pts) — the specific schools serving this property underperform the Huntsville City average; the district grade overstates school quality for this exact location.
• Watch-outs: flood insurance adds $66/mo; built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.8%/yr); 570 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,709 units permitted in Madison County in 2024 (1,186 in 5+ unit buildings).
• Madison County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $25k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe flood risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 3.8% in Huntsville — 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.
• This rent is only 17% of the median local income ($91k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 204 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1951 — 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?
• 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.
• 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?