650 Railroad St NE

Cleveland, TN 37311

$329,000B-

16 bd · 3.5 ba · 2,288 sqft · Built 1966 · MultiFamily · Active · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,159/mo
• Mortgage (P&I): −$1,725
• Tax + insurance: −$252
• HOA: −$0
• Vac / Maint / Mgmt: −$873
• Net cashflow: $1,308/mo
• Annual: $15,701/yr
• Cap rate: 11.07%
• Cash-on-cash: 17.04%
• DSCR: 1.76
• 1% rule: 1.26%
• Cash to close: $92,120

Investor read

• This is a 4 × 1-bed/1-bath units multifamily listed at $329k.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $327/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $329k).
• It's been on market 65 days — a 6% lower offer ($309k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $309k (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 $10k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#55 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: employment D, crime F, amenities F.
• Cleveland (urban): math 23% / reading 28% proficiency, ranked #85 of 139 in TN (top 61%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Arnold Memorial Elementary (math 22% / reading 17%, grade F, #654 of 952 statewide, top 72%, 289 students, 0% FRL); Cleveland Middle (math 25% / reading 26%, grade F, #147 of 333 statewide, top 45%, 1,271 students, 0% FRL); Cleveland High (math 8% / reading 29%, grade F, #208 of 332 statewide, top 63%, 1,842 students, 0% FRL) — zoned schools average 0% FRL vs 53% district-wide (53 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising (+3.0%/yr); 198 active listings in the ZIP; 768 units permitted in Bradley County in 2024 (0 in 5+ unit buildings).
• Bradley County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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 $170k; list at $329k implies a 94% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $92k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.1% vs local median 3.5% in Cleveland — 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 $4,159/mo this rent would consume 106% of the median local household income ($47k/yr) (locally 1184% 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 65 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 1966 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-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 F 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?