397 John Day Rd

Canton, MS 39046

$39,900B

2 bd · 3.0 ba · 1,690 sqft · Built 1977 · SingleFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,490/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$95
• HOA: −$0
• Vac / Maint / Mgmt: −$313
• Net cashflow: $873/mo
• Annual: $10,474/yr
• Cap rate: 32.54%
• Cash-on-cash: 93.75%
• DSCR: 5.17
• 1% rule: 3.74%
• Cash to close: $11,172

Investor read

• This is a 2-bed/3.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $873 ($10k/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 38 days — a 3% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (3.0% 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 60/100 on livability (#229 in MS) — a middle-class / working-renter tenant base. Strengths: cost of living A+, crime B+; Watch: amenities F, commute F, employment F.
• Madison County School District (rural): math 54% / reading 54% proficiency, ranked #3 of 130 in MS (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Luther Branson School (math 47% / reading 47%, grade D-, #82 of 375 statewide, top 23%, 158 students, 98% FRL); Shirley D. Simmons Middle School (math 32% / reading 37%, grade F, #81 of 179 statewide, top 45%, 146 students, 98% FRL); Velma Jackson High School (math 24% / reading 34%, grade F, #91 of 197 statewide, top 49%, 202 students, 98% FRL) — zoned schools average 98% FRL vs 29% district-wide (69 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 37% at this address vs 54% district-wide (-17 pts) — the specific schools serving this property underperform the Madison County School District average; the district grade overstates school quality for this exact location.
• Market conditions: 363 active listings in the ZIP; 553 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at +34% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 32.5% vs local median 4.3% in Canton — 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 38 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.