500 W Main St

Mount Vernon, KY 40456

$79,500C+

2 bd · 2.0 ba · 1,454 sqft · Built 1950 · Other · Pending · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $813/mo
• Mortgage (P&I): −$417
• Tax + insurance: −$102
• HOA: −$0
• Vac / Maint / Mgmt: −$171
• Net cashflow: $123/mo
• Annual: $1,474/yr
• Cap rate: 8.15%
• Cash-on-cash: 6.62%
• DSCR: 1.29
• 1% rule: 1.02%
• Cash to close: $22,260

Investor read

• This is a 2-bed/2.0-bath other listed at $80k.
• At list price, monthly cash flow is $123 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($813 rent vs $80k).
• It's been on market 79 days — a 6% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (6.0% below list) — sets the bar for market timing.
• In year one you build about $8k of equity ($550 loan paydown + $8k appreciation (10.0% local appreciation)).
• Location reads 63/100 on livability (#321 in KY) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+; Watch: housing C-, schools D+, amenities F.
• Rockcastle County (rural): math 23% / reading 40% proficiency, ranked #102 of 165 in KY (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 64 active listings in the ZIP.
• Rockcastle County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 7 sale attempts since 20y ago; this cycle's ask has dropped $50k (39%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, 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 flood risk; moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.1% vs local median 2.8% in Mount Vernon — 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.

Questions for listing agent

• It's been on market 79 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.