Redman Advantage "A" Plan

Louisville/Jefferson County metro government (balance), KY 40216

$39,900B-

2 bd · 1.0 ba · 768 sqft · Built — · Manufactured · Active · 121 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,171/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$66
• HOA: −$0
• Vac / Maint / Mgmt: −$246
• Net cashflow: $650/mo
• Annual: $7,794/yr
• Cap rate: 25.83%
• Cash-on-cash: 69.77%
• DSCR: 4.10
• 1% rule: 2.94%
• Cash to close: $11,172

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $40k. Condition is rated good.
• At list price, monthly cash flow is $650 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 121 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Jefferson County (urban): math 19% / reading 35% proficiency, ranked #121 of 165 in KY (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Cane Run Elementary (math 2% / reading 12%, grade F, #662 of 676 statewide, top 99%, 377 students, 80% FRL); Stuart Academy (math 4% / reading 17%, grade F, #216 of 217 statewide, top 100%, 1,105 students, 72% FRL); Western High (math 2% / reading 12%, grade F, #248 of 254 statewide, top 98%, 869 students, 77% FRL) — zoned schools average 76% FRL vs 56% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 8% at this address vs 27% district-wide (-19 pts) — the specific schools serving this property underperform the Jefferson County average; the district grade overstates school quality for this exact location.
• Market conditions: Rents flat; 210 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); 2,836 units permitted in Jefferson County in 2024 (1,558 in 5+ unit buildings).
• Jefferson County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 0.6% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 25.8% vs local median 4.0% in Louisville/Jefferson County metro government (balance) — 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 121 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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.
• 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.