914 Literary Cir

Lexington-Fayette, KY 40513

$410,000D+

5 bd · 4.5 ba · 3,298 sqft · Built 2002 · Townhouse · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,473/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$514
• HOA: −$0
• Vac / Maint / Mgmt: −$729
• Net cashflow: $80/mo
• Annual: $955/yr
• Cap rate: 6.53%
• Cash-on-cash: 0.83%
• DSCR: 1.04
• 1% rule: 0.85%
• Cash to close: $114,800

Investor read

• This is a 5-bed/4.5-bath townhouse listed at $410k.
• At list price, monthly cash flow is $80 ($955/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $347k (15.3% below list).
• It's been on market 28 days — a 2% lower offer ($404k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $347k (15.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Rosa Parks Elementary School (math 69% / reading 67%, grade B+, #11 of 676 statewide, top 1%, 706 students, 15% FRL); Beaumont Middle School (math 44% / reading 58%, grade C, #20 of 217 statewide, top 10%, 843 students, 40% FRL); Paul Laurence Dunbar High School (math 51% / reading 49%, grade D+, #12 of 254 statewide, top 4%, 1,946 students, 46% FRL).
• Zoned-school proficiency averages 56% at this address vs 40% district-wide (+16 pts) — the actual schools serving this property are materially stronger than the Fayette County average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: 50 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.5% vs local median 3.8% in Lexington-Fayette — 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 33% of the median local income ($128k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• 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.