2242 Otey St. St

Lynchburg, VA 24501

$204,900C

4 bd · 2.0 ba · 1,549 sqft · Built 1900 · MultiFamily · Pending · 121 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,365/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$202
• HOA: −$0
• Vac / Maint / Mgmt: −$497
• Net cashflow: $592/mo
• Annual: $7,106/yr
• Cap rate: 9.76%
• Cash-on-cash: 12.39%
• DSCR: 1.55
• 1% rule: 1.15%
• Cash to close: $57,372

Investor read

• This is a 2 × 2.0-bed/1.0-bath units multifamily listed at $205k.
• At list price, monthly cash flow is $592 ($7k/yr) — positive. Per door: $296/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $205k).
• It's been on market 121 days — a 12% lower offer ($180k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $180k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 91/100 on livability (#1 in VA, #58 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime C-, employment D+.
• Lynchburg City Public School District (urban): math 36% / reading 61% proficiency, ranked #104 of 131 in VA (top 79%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 221 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 472 units permitted in Lynchburg city in 2024 (240 in 5+ unit buildings).
• Lynchburg County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $15k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $120k; list at $205k implies a 71% 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 9.8% vs local median 4.0% in Lynchburg — 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 $2,365/mo this rent would consume 67% of the median local household income ($42k/yr) (locally 1717% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 121 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1900 — 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 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?
• 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.