838-840 Rabbit Rd

Sanibel, FL 33957

$699,000D-

4 bd · 2.0 ba · 1,600 sqft · Built 1990 · MultiFamily · Pending · 497 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,899/mo
• Mortgage (P&I): −$3,666
• Tax + insurance: −$1,592
• HOA: −$0
• Vac / Maint / Mgmt: −$1,239
• Net cashflow: $-597/mo
• Annual: $-7,164/yr
• Cap rate: 6.00%
• Cash-on-cash: -1.04%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $195,720

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $699k.
• At list price, monthly cash flow is $-597 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $613k (12.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $590k (15.6% below list).
• It's been on market 497 days — a 12% lower offer ($615k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $590k (15.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#541 in FL) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+; Watch: housing D+, amenities F, commute F.
• Lee (suburban): math 47% / reading 50% proficiency, ranked #42 of 73 in FL (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: The Sanibel School (math 92% / reading 92%, grade A+, #5 of 2,144 statewide, top 0%, 289 students, 12% FRL); South Fort Myers High School (math 23% / reading 30%, grade F, #489 of 667 statewide, top 74%, 1,917 students, 50% FRL) — zoned schools average 31% FRL vs 57% district-wide (26 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 526 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 15,411 units permitted in Lee County in 2024 (4,686 in 5+ unit buildings).
• Lee County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $280k (29%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 3.8% in Sanibel — 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

• 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 497 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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.