506 N Market St

Kokomo, IN 46901

$79,900B-

5 bd · 3.5 ba · 2,430 sqft · Built 1889 · MultiFamily · Pending · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,034/mo
• Mortgage (P&I): −$419
• Tax + insurance: −$175
• HOA: −$0
• Vac / Maint / Mgmt: −$637
• Net cashflow: $1,803/mo
• Annual: $21,639/yr
• Cap rate: 33.38%
• Cash-on-cash: 96.72%
• DSCR: 5.30
• 1% rule: 3.80%
• Cash to close: $22,372

Investor read

• This is a 1×3bd/1.5ba + 1×2bd/1.5ba + 1×1bd/1.5ba units multifamily listed at $80k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive. Per door: $601/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $80k).
• It's been on market 46 days — a 3% lower offer ($78k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $78k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $552 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#227 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A; Watch: crime D, schools F, amenities F.
• Kokomo School Corporation (urban): math 22% / reading 30% proficiency, ranked #264 of 301 in IN (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1889 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.5%/yr); 242 active listings in the ZIP; 194 units permitted in Howard County in 2024 (0 in 5+ unit buildings).
• Howard County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 10y ago; this cycle's ask has dropped $20k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $22k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 33.4% vs local median 5.2% in Kokomo — 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 $3,034/mo this rent would consume 60% of the median local household income ($60k/yr) (locally 1116% 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 46 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1889 — 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 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?
• 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.