708 Edgewood St SW

Decatur, AL 35601

$159,000C-

3 bd · 1.0 ba · 1,434 sqft · Built 1960 · SingleFamily · Pending · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,452/mo
• Mortgage (P&I): −$834
• Tax + insurance: −$100
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $213/mo
• Annual: $2,559/yr
• Cap rate: 7.90%
• Cash-on-cash: 5.75%
• DSCR: 1.26
• 1% rule: 0.91%
• Cash to close: $44,520

Investor read

• This is a 3-bed/1.0-bath single-family listed at $159k.
• At list price, monthly cash flow is $213 ($3k/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 $145k (8.6% below list).
• It's been on market 75 days — a 6% lower offer ($149k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $145k (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 $5k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#28 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, employment D+, crime F.
• Decatur City (urban): math 22% / reading 40% proficiency, ranked #66 of 129 in AL (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+4.7%/yr); 223 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 84% of comp listings sitting > 30 days — soft ceiling on asking rent; 231 units permitted in Morgan County in 2024 (0 in 5+ unit buildings).
• Morgan County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $11k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $115k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wind risk, 23% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.9% vs local median 4.0% in Decatur — 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 runs 34% of the median local income ($51k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 75 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.