36 SR 399

Palmer, TN 37365

$155,000D

3 bd · 1.0 ba · 1,280 sqft · Built 2002 · SingleFamily · Active · 227 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,111/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$94
• HOA: −$0
• Vac / Maint / Mgmt: −$233
• Net cashflow: $-30/mo
• Annual: $-355/yr
• Cap rate: 6.06%
• Cash-on-cash: -0.82%
• DSCR: 0.96
• 1% rule: 0.72%
• Cash to close: $43,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $155k.
• At list price, monthly cash flow is $-30 ($-355/yr) — negative.
• To cash-flow at today's rent, offer at most $150k (3.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $111k (28.3% below list).
• It's been on market 227 days — a 12% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $111k (28.3% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($1k loan paydown + $5k appreciation (3.0% local appreciation)).
• Location reads 47/100 on livability (#421 in TN) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Grundy County (rural): math 21% / reading 23% proficiency, ranked #110 of 139 in TN (top 79%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: North Elementary (math 32% / reading 22%, grade F, #496 of 952 statewide, top 55%, 338 students, 0% FRL); Grundy County High School (math 8% / reading 17%, grade F, #259 of 332 statewide, top 79%, 534 students, 0% FRL) — zoned schools average 0% FRL vs 72% district-wide (72 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 28 active listings in the ZIP; 16 units permitted in Grundy County in 2024 (0 in 5+ unit buildings).
• Grundy County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $15k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $110k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $43k cash investment doubles in ~7 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$30k 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.

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 227 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• 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 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?
• 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?
• 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.