1505 Prairie Ln

Montgomery, AL 36117

$259,500D-

3 bd · 3.0 ba · 1,874 sqft · Built 1985 · SingleFamily · Active · 656 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,025/mo
• Mortgage (P&I): −$1,361
• Tax + insurance: −$277
• HOA: −$0
• Vac / Maint / Mgmt: −$425
• Net cashflow: $-38/mo
• Annual: $-457/yr
• Cap rate: 6.12%
• Cash-on-cash: -0.63%
• DSCR: 0.97
• 1% rule: 0.78%
• Cash to close: $72,660

Investor read

• This is a 3-bed/3.0-bath single-family listed at $260k.
• At list price, monthly cash flow is $-38 ($-457/yr) — negative.
• To cash-flow at today's rent, offer at most $253k (2.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $202k (22.0% below list).
• It's been on market 656 days — a 12% lower offer ($228k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $202k (22.0% below list) — sets the bar for 1% rule.
• 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 (#138 in AL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools C-, employment D, crime F.
• Montgomery County (urban): math 9% / reading 31% proficiency, ranked #106 of 129 in AL (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+3.0%/yr); 407 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 460 units permitted in Montgomery County in 2024 (37 in 5+ unit buildings).
• Montgomery County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 29y ago; this cycle's ask is 6% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $138k; list at $260k implies a 89% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 33% of the median local income ($75k/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 656 days. Have you received any prior offers? Is the seller open to a 22% 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.
• 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.
• 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.