2326 Elm Ave

Portsmouth, VA 23704

$254,000B-

None bd · 2.0 ba · 1,584 sqft · Built 1924 · MultiFamily · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,858/mo
• Mortgage (P&I): −$1,332
• Tax + insurance: −$726
• HOA: −$0
• Vac / Maint / Mgmt: −$600
• Net cashflow: $200/mo
• Annual: $2,394/yr
• Cap rate: 9.25%
• Cash-on-cash: 10.56%
• DSCR: 1.47
• 1% rule: 1.13%
• Cash to close: $71,120

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $254k.
• At list price, monthly cash flow is $200 ($2k/yr) — positive. Per door: $100/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $254k).
• It's been on market 69 days — a 6% lower offer ($239k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $239k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; built in 1924 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 131 active listings in the ZIP; 34 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 8 sale attempts since 10y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $140k; list at $254k implies a 81% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% 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 9.3% vs local median 4.6% in Portsmouth — 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 $2,858/mo this rent would consume 69% of the median local household income ($50k/yr) (locally 1727% 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 69 days. Have you received any prior offers? Is the seller open to a 6% 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 1924 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 B-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?