3105 Davis Ave

Cave Spring, VA 24015

$369,950D-

4 bd · 2.0 ba · 1,985 sqft · Built 1965 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,922/mo
• Mortgage (P&I): −$1,940
• Tax + insurance: −$404
• HOA: −$0
• Vac / Maint / Mgmt: −$614
• Net cashflow: $-35/mo
• Annual: $-426/yr
• Cap rate: 6.18%
• Cash-on-cash: -0.41%
• DSCR: 0.98
• 1% rule: 0.79%
• Cash to close: $103,586

Investor read

• This is a 4-bed/2.0-bath single-family listed at $370k.
• At list price, monthly cash flow is $-35 ($-426/yr) — negative.
• To cash-flow at today's rent, offer at most $364k (1.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $292k (21.0% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $292k (21.0% 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 $11k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#113 in VA, #3,513 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A-; Watch: amenities F, commute F.
• Roanoke County Public School District (suburban): math 71% / reading 78% proficiency, ranked #9 of 131 in VA (top 7%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Green Valley Elementary (math 63% / reading 75%, grade A-, #351 of 1,108 statewide, top 32%, 518 students, 43% FRL); Hidden Valley Middle (math 76% / reading 83%, grade A+, #28 of 342 statewide, top 8%, 578 students, 26% FRL); Hidden Valley High (math 90% / reading 92%, grade A+, #5 of 319 statewide, top 1%, 830 students, 24% FRL).
• Market conditions: Rents rising fast (+6.4%/yr); 121 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 360 units permitted in Roanoke County in 2024 (228 in 5+ unit buildings).
• Roanoke County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $200k; list at $370k implies a 85% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 3.4% in Cave Spring — 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.
• At $2,922/mo this rent would consume 50% of the median local household income ($70k/yr) (locally 525% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Built in 1965 — 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 A-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?
• 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.