656 Otsego St

Havre de Grace, MD 21078

$399,999B-

8 bd · 4.0 ba · 3,768 sqft · Built 1940 · MultiFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,120/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$372
• HOA: −$0
• Vac / Maint / Mgmt: −$1,285
• Net cashflow: $2,365/mo
• Annual: $28,376/yr
• Cap rate: 13.39%
• Cash-on-cash: 25.34%
• DSCR: 2.13
• 1% rule: 1.53%
• Cash to close: $112,000

Investor read

• This is a 4 × 2-bed/1-bath units multifamily listed at $400k.
• At list price, monthly cash flow is $2k ($28k/yr) — positive. Per door: $591/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $400k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#32 in MD, #1,087 nationally) — a professional / high-income tenant draw. Strengths: housing A+, health & safety A+, crime A; Watch: amenities C-, cost of living C-.
• Harford County Public Schools (suburban): math 22% / reading 39% proficiency, ranked #9 of 24 in MD (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Havre De Grace Elementary (math 15% / reading 27%, grade F, #332 of 860 statewide, top 39%, 566 students, 56% FRL); Havre De Grace Middle (math 8% / reading 41%, grade F, #108 of 225 statewide, top 50%, 626 students, 47% FRL); Havre De Grace High (math 47% / reading 62%, grade C-, #91 of 222 statewide, top 42%, 818 students, 40% FRL) — zoned schools average 47% FRL vs 24% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 178 active listings in the ZIP; solid renter incomes; 803 units permitted in Harford County in 2024 (26 in 5+ unit buildings).
• Current owner paid $210k; list at $400k implies a 90% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $112k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wind risk, 26% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.4% vs local median 2.4% in Havre de Grace — 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 $6,120/mo this rent would consume 69% of the median local household income ($107k/yr) (locally 327% 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?
• 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?
• 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.