1312 Applegate Dr

Alabaster, AL 35007

$188,000D

2 bd · 2.0 ba · 1,200 sqft · Built 1987 · Townhouse · Active · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,718/mo
• Mortgage (P&I): −$986
• Tax + insurance: −$213
• HOA: −$31
• Vac / Maint / Mgmt: −$361
• Net cashflow: $128/mo
• Annual: $1,532/yr
• Cap rate: 7.11%
• Cash-on-cash: 2.91%
• DSCR: 1.13
• 1% rule: 0.91%
• Cash to close: $52,640

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $188k.
• At list price, monthly cash flow is $128 ($2k/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 $172k (8.6% below list).
• It's been on market 41 days — a 3% lower offer ($182k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $172k (8.6% 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 $6k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#14 in AL, #3,512 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: amenities D-, commute F, health & safety F.
• Alabaster City (suburban): math 30% / reading 57% proficiency, ranked #17 of 129 in AL (top 13%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Meadow View Elementary School (math 59% / reading 71%, grade B+, #40 of 627 statewide, top 7%, 944 students, 53% FRL); Thompson Middle School (math 24% / reading 57%, grade F, #56 of 257 statewide, top 22%, 1,434 students, 51% FRL); Thompson High School (math 34% / reading 38%, grade F, #43 of 305 statewide, top 14%, 2,203 students, 48% FRL) — zoned schools average 50% FRL vs 31% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.2%/yr); 226 active listings in the ZIP; 4 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; 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.
• 2 sale attempts; this cycle's ask has dropped $12k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $155k; 21% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wind risk, 55% chance of damaging wind over 30y; extreme-heat days projected 8→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.1% vs local median 4.1% in Alabaster — 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 41 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.