4700 Westgrove St #709

Raleigh, NC 27606

$125,000D

2 bd · 1.0 ba · 700 sqft · Built 1986 · Condo · Active · 230 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,281/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$121
• HOA: −$305
• Vac / Maint / Mgmt: −$269
• Net cashflow: $-70/mo
• Annual: $-839/yr
• Cap rate: 5.62%
• Cash-on-cash: -2.40%
• DSCR: 0.89
• 1% rule: 1.02%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath condo listed at $125k.
• At list price, monthly cash flow is $-70 ($-839/yr) — negative.
• To cash-flow at today's rent, offer at most $113k (9.9% below list).
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 230 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#10 in NC, #1,028 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Wake County Schools (suburban): math 52% / reading 60% proficiency, ranked #35 of 178 in NC (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Reedy Creek Elementary (math 42% / reading 52%, grade D-, #497 of 1,410 statewide, top 38%, 577 students, 58% FRL); Reedy Creek Middle (math 44% / reading 57%, grade C, #108 of 475 statewide, top 23%, 768 students, 40% FRL) — zoned schools average 49% FRL vs 30% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 24% of rent.
• Market conditions: Rents rising (+1.9%/yr); 229 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 15,249 units permitted in Wake County in 2024 (5,568 in 5+ unit buildings).
• Wake County population projected at +51% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $66k; list at $125k implies a 88% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 61% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 2.7% in Raleigh — 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 230 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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?