The Erin - Build On-Your-Lot Plan

Millville, DE 19967

$299,800F

3 bd · 2.0 ba · 1,677 sqft · Built — · SingleFamily · Active · 173 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,081/mo
• Mortgage (P&I): −$2,935
• Tax + insurance: −$988
• HOA: −$0
• Vac / Maint / Mgmt: −$437
• Net cashflow: $-2,279/mo
• Annual: $-27,346/yr
• Cap rate: 1.53%
• Cash-on-cash: -17.03%
• DSCR: 0.24
• 1% rule: 0.37%
• Cash to close: $156,683

Investor read

• This is a 3-bed/2.0-bath single-family listed at $300k. Condition is rated good.
• At list price, monthly cash flow is $-2k ($-27k/yr) — negative.
• To cash-flow at today's rent, offer at most $230k (23.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $208k (30.6% below list).
• It's been on market 173 days — a 12% lower offer ($264k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $208k (30.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-0.8%/yr); year-one equity from $4k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#49 in DE) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A, housing A; Watch: amenities F, commute F, cost of living F.
• Indian River School District (rural): math 25% / reading 41% proficiency, ranked #14 of 26 in DE (top 54%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lord Baltimore Elementary School (math 51% / reading 67%, grade B-, #4 of 105 statewide, top 4%, 579 students, 0% FRL); Selbyville Middle School (math 20% / reading 49%, grade F, #12 of 36 statewide, top 34%, 719 students, 0% FRL); Indian River High School (math 32% / reading 52%, grade F, #10 of 40 statewide, top 26%, 1,088 students, 0% FRL) — zoned schools average 0% FRL vs 49% district-wide (49 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 45% at this address vs 33% district-wide (+12 pts) — the actual schools serving this property are materially stronger than the Indian River School District average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: property tax is 2.8% of price; flood insurance adds $56/mo.
• Market conditions: 169 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 140d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 1.5% vs local median 2.8% in Millville — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 173 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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?
• 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?