25 E Palatine Rd #309

Arlington Heights, IL 60004

$214,900D

2 bd · 2.0 ba · 1,200 sqft · Built 1967 · Condo · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,459/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$392
• HOA: −$504
• Vac / Maint / Mgmt: −$516
• Net cashflow: $-81/mo
• Annual: $-969/yr
• Cap rate: 5.84%
• Cash-on-cash: -1.61%
• DSCR: 0.93
• 1% rule: 1.14%
• Cash to close: $60,172

Investor read

• This is a 2-bed/2.0-bath condo listed at $215k.
• At list price, monthly cash flow is $-81 ($-969/yr) — negative.
• To cash-flow at today's rent, offer at most $201k (6.6% below list).
• Meets the 1% rule at list price ($2k rent vs $215k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $201k (6.6% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#60 in IL, #1,055 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, employment A+; Watch: health & safety D+, amenities F, cost of living F.
• Township Hsd 214 (suburban): math 42% / reading 45% proficiency, ranked #103 of 620 in IL (top 17%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Patton Elem School (math 43% / reading 42%, grade F, #329 of 2,056 statewide, top 16%, 428 students, 0% FRL); Thomas Middle School (math 42% / reading 43%, grade D-, #109 of 665 statewide, top 17%, 961 students, 0% FRL); John Hersey High School (math 56% / reading 63%, grade C+, #20 of 693 statewide, top 3%, 2,026 students, 0% FRL).
• Watch-outs: HOA is 20% of rent.
• Market conditions: Rents rising (+3.9%/yr); 87 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 6,272 units permitted in Cook County in 2024 (4,658 in 5+ unit buildings).
• Current owner paid $146k; 47% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.8% vs local median 2.9% in Arlington Heights — 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?
• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.