308 Diamondhead Dr

Hot Springs, AR 71913

$272,500C

3 bd · 2.0 ba · 2,048 sqft · Built 2014 · SingleFamily · Active · 95 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,589/mo
• Mortgage (P&I): −$1,429
• Tax + insurance: −$245
• HOA: −$108
• Vac / Maint / Mgmt: −$544
• Net cashflow: $264/mo
• Annual: $3,165/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.15%
• DSCR: 1.18
• 1% rule: 0.95%
• Cash to close: $76,300

Investor read

• This is a 3-bed/2.0-bath single-family listed at $272k.
• At list price, monthly cash flow is $264 ($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 $259k (5.0% below list).
• It's been on market 95 days — a 9% lower offer ($248k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $248k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#140 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: schools D, crime F, amenities F.
• Lakeside School District (urban): math 47% / reading 45% proficiency, ranked #28 of 238 in AR (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+6.4%/yr); 986 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 117 units permitted in Garland County in 2024 (24 in 5+ unit buildings).
• Garland County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 13y ago; this cycle's ask has dropped $17k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $179k; list at $272k implies a 52% gain — meaningful room to come down on a strong offer.
• 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 7.5% vs local median 2.8% in Hot Springs — 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.
• At $2,589/mo this rent would consume 55% of the median local household income ($56k/yr) (locally 1442% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 95 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?
• 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.