804 Midway St

Smithfield, NC 27577

$144,000C+

2 bd · 2.0 ba · 975 sqft · Built 1940 · MultiFamily · Pending · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,336/mo
• Mortgage (P&I): −$755
• Tax + insurance: −$129
• HOA: −$0
• Vac / Maint / Mgmt: −$491
• Net cashflow: $961/mo
• Annual: $11,536/yr
• Cap rate: 14.30%
• Cash-on-cash: 28.61%
• DSCR: 2.27
• 1% rule: 1.62%
• Cash to close: $40,320

Investor read

• This is a 2 × 1-bed/1.0-bath units multifamily listed at $144k.
• At list price, monthly cash flow is $961 ($12k/yr) — positive. Per door: $481/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $144k).
• It's been on market 51 days — a 3% lower offer ($140k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $140k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $996 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#259 in NC) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing B+; Watch: crime F, amenities F, commute F.
• Johnston County Public Schools (rural): math 39% / reading 42% proficiency, ranked #105 of 178 in NC (top 59%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Smithfield Middle (math 20% / reading 32%, grade F, #385 of 475 statewide, top 81%, 501 students, 99% FRL); Smithfield-Selma High (math 25% / reading 37%, grade F, #454 of 535 statewide, top 85%, 1,503 students, 69% FRL) — zoned schools average 84% FRL vs 41% district-wide (44 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 28% at this address vs 40% district-wide (-12 pts) — the specific schools serving this property underperform the Johnston County Public Schools average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.1%/yr); 401 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); 2,783 units permitted in Johnston County in 2024 (6 in 5+ unit buildings).
• Johnston County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $36k; list at $144k implies a 306% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $40k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 78% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.3% vs local median 3.5% in Smithfield — 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 51 days. Have you received any prior offers? Is the seller open to a 3% 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 1940 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.