71 Unit Investment Package

Erie, PA 16502

$3,799,900B-

None bd · None ba · 68,288 sqft · Built — · MultiFamily · Pending · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $69,440/mo
• Mortgage (P&I): −$19,927
• Tax + insurance: −$6,333
• HOA: −$0
• Vac / Maint / Mgmt: −$14,582
• Net cashflow: $28,597/mo
• Annual: $343,168/yr
• Cap rate: 15.32%
• Cash-on-cash: 32.25%
• DSCR: 2.44
• 1% rule: 1.83%
• Cash to close: $1,063,972

Investor read

• This is a multifamily listed at $3.80M. Condition is rated fair.
• At list price, monthly cash flow is $29k ($343k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($69k rent vs $3.80M).
• It's been on market 98 days — a 9% lower offer ($3.46M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.46M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $26k of loan paydown is wiped out by about $114k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#109 in PA, #840 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D+, employment F.
• Erie City SD (urban): math 12% / reading 19% proficiency, ranked #510 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Perry El Sch (math 8% / reading 17%, grade F, #1,362 of 1,518 statewide, top 92%, 462 students, 100% FRL); Northwest Pa Collegiate Academy (math 82%, 753 students, 100% FRL) — zoned schools average 100% FRL vs 81% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.0%/yr); 56 active listings in the ZIP; lower-income renter base — watch delinquency; 364 units permitted in Erie County in 2024 (188 in 5+ unit buildings).
• Erie County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $1.06M cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.3% vs local median 5.4% in Erie — 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 $69,440/mo this rent would consume 2161% of the median local household income ($39k/yr) (locally 1044% 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 98 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• Crime grade is D 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.
• 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.

Repairs flagged (vision-AI assessment)

• Major: siding — Significant damage and peeling
• Major: roof — Visible damage and potential leaks
• Major: flooring — Worn and damaged
• Major: paint — Painted walls with visible wear
• Major: windows — Old and possibly inefficient
• Major: HVAC/mechanicals — No visible signs of recent maintenance