655-659 Scaffold Cane Rd

Berea, KY 40403

$279,900D+

12 bd · 6.0 ba · 2,072 sqft · Built 2007 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,814/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$533
• HOA: −$0
• Vac / Maint / Mgmt: −$591
• Net cashflow: $222/mo
• Annual: $2,667/yr
• Cap rate: 7.53%
• Cash-on-cash: 4.42%
• DSCR: 1.20
• 1% rule: 1.01%
• Cash to close: $78,372

Investor read

• This is a 3 × 2-bed/1-bath units multifamily listed at $280k.
• At list price, monthly cash flow is $222 ($3k/yr) — positive. Per door: $74/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $280k).
• It's been on market 17 days — a 2% lower offer ($276k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $276k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#104 in KY, #4,354 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Madison County (town): math 31% / reading 47% proficiency, ranked #35 of 165 in KY (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 205 active listings in the ZIP; 453 units permitted in Madison County in 2024 (64 in 5+ unit buildings).
• Madison County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: severe flood risk; moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.5% vs local median 3.0% in Berea — 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 $2,814/mo this rent would consume 55% of the median local household income ($62k/yr) (locally 685% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.