2120 Shade Tree Dr

Conway, AR 72032

$220,000D

2 bd · 2.0 ba · 1,569 sqft · Built 2000 · SingleFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,611/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$338
• Net cashflow: $-13/mo
• Annual: $-157/yr
• Cap rate: 6.22%
• Cash-on-cash: -0.25%
• DSCR: 0.99
• 1% rule: 0.73%
• Cash to close: $61,600

Investor read

• This is a 2-bed/2.0-bath single-family listed at $220k.
• At list price, monthly cash flow is $-13 ($-157/yr) — negative.
• To cash-flow at today's rent, offer at most $218k (1.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $161k (26.8% below list).
• It's been on market 37 days — a 3% lower offer ($213k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $161k (26.8% 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 $7k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#71 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools B; Watch: employment C-, crime F, amenities F.
• Conway School District (urban): math 43% / reading 47% proficiency, ranked #36 of 238 in AR (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.1%/yr); 187 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 865 units permitted in Faulkner County in 2024 (451 in 5+ unit buildings).
• Faulkner County population projected at +32% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $19k; list at $220k implies a 1058% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 3.9% in Conway — 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

• 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 37 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• 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?
• 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?
• 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.