424 School St

Melbourne, AR 72556

$129,900D

3 bd · 2.0 ba · 1,144 sqft · Built — · SingleFamily · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,046/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$216
• HOA: −$0
• Vac / Maint / Mgmt: −$220
• Net cashflow: $-71/mo
• Annual: $-852/yr
• Cap rate: 5.64%
• Cash-on-cash: -2.34%
• DSCR: 0.90
• 1% rule: 0.81%
• Cash to close: $36,372

Investor read

• This is a 3-bed/2.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $-71 ($-852/yr) — negative.
• To cash-flow at today's rent, offer at most $120k (7.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $105k (19.4% below list).
• It's been on market 34 days — a 3% lower offer ($126k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $105k (19.4% below list) — sets the bar for 1% rule.
• In year one you build about $4k of equity ($898 loan paydown + $3k appreciation (2.2% local appreciation)).
• Location reads 66/100 on livability (#127 in AR) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A, crime B+; Watch: amenities F, commute F, employment F.
• Melbourne School District (rural): math 48% / reading 51% proficiency, ranked #22 of 238 in AR (top 9%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Melbourne Elementary School (math 56% / reading 53%, grade C, #60 of 454 statewide, top 15%, 481 students, 44% FRL); Melbourne High School (math 41% / reading 49%, grade D-, #27 of 292 statewide, top 10%, 390 students, 44% FRL) — zoned schools at 44% FRL track the district average.
• Market conditions: 67 active listings in the ZIP; 6 units permitted in Izard County in 2024 (0 in 5+ unit buildings).
• Izard County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $49k; list at $130k implies a 165% gain — meaningful room to come down on a strong offer.
• At projected returns (2.2% appreciation + 3.0% rent growth), your $36k cash investment doubles in ~9 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 3.8% in Melbourne — 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 34 days. Have you received any prior offers? Is the seller open to a 19% 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.
• 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.