403 Gilmer Street Ext

Reidsville, NC 27320

$595,000C+

None bd · None ba · 8,866 sqft · Built 1940 · MultiFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,797/mo
• Mortgage (P&I): −$3,120
• Tax + insurance: −$660
• HOA: −$0
• Vac / Maint / Mgmt: −$1,427
• Net cashflow: $1,589/mo
• Annual: $19,070/yr
• Cap rate: 9.50%
• Cash-on-cash: 11.45%
• DSCR: 1.51
• 1% rule: 1.14%
• Cash to close: $166,600

Investor read

• This is a 8 × 2-bed/1-bath units multifamily listed at $595k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $199/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $595k).
• It's been on market 30 days — a 2% lower offer ($586k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $586k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#553 in NC) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: crime F, amenities F, commute F.
• Rockingham County Schools (rural): math 38% / reading 40% proficiency, ranked #120 of 178 in NC (top 67%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Reidsville Middle (math 27% / reading 33%, grade F, #335 of 475 statewide, top 72%, 614 students, 100% FRL); Reidsville High (math 42% / reading 32%, grade F, #414 of 535 statewide, top 79%, 753 students, 100% FRL) — zoned schools average 100% FRL vs 52% district-wide (48 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 258 active listings in the ZIP; 344 units permitted in Rockingham County in 2024 (0 in 5+ unit buildings).
• Rockingham County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $400k; 49% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $167k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.5% vs local median 3.7% in Reidsville — 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

• 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 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?
• 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.
• 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.