116 Black Watch Dr #116

Hilton Head Island, SC 29926

$247,000D+

3 bd · 2.5 ba · 1,493 sqft · Built 1990 · Condo · Pending · 196 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,616/mo
• Mortgage (P&I): −$1,295
• Tax + insurance: −$214
• HOA: −$572
• Vac / Maint / Mgmt: −$549
• Net cashflow: $-14/mo
• Annual: $-173/yr
• Cap rate: 6.22%
• Cash-on-cash: -0.25%
• DSCR: 0.99
• 1% rule: 1.06%
• Cash to close: $69,160

Investor read

• This is a 3-bed/2.5-bath condo listed at $247k.
• At list price, monthly cash flow is $-14 ($-173/yr) — negative.
• To cash-flow at today's rent, offer at most $244k (1.0% below list).
• Meets the 1% rule at list price ($3k rent vs $247k).
• It's been on market 196 days — a 12% lower offer ($217k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $217k (12.0% 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 $7k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#157 in SC) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaufort 01 (town): math 42% / reading 51% proficiency, ranked #17 of 80 in SC (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 22% of rent.
• Market conditions: Rents soft (-0.2%/yr); 385 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,824 units permitted in Beaufort County in 2024 (618 in 5+ unit buildings).
• Beaufort County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts; this cycle's ask has dropped $52k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $98k; list at $247k implies a 151% gain — meaningful room to come down on a strong offer.
• Cap rate 6.2% vs local median 3.0% in Hilton Head Island — 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 32% of the median local income ($98k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 196 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 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?
• 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?