401 S Gray St

Indianapolis city (balance), IN 46201

$129,900C+

3 bd · 1.0 ba · 1,092 sqft · Built 1925 · SingleFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,367/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$101
• HOA: −$0
• Vac / Maint / Mgmt: −$287
• Net cashflow: $298/mo
• Annual: $3,573/yr
• Cap rate: 9.04%
• Cash-on-cash: 9.82%
• DSCR: 1.44
• 1% rule: 1.05%
• Cash to close: $36,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $298 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $130k).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Indianapolis Public Schools (urban): math 14% / reading 20% proficiency, ranked #286 of 301 in IN (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.3%/yr); 483 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,906 units permitted in Marion County in 2024 (621 in 5+ unit buildings).
• Marion County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 7.3% rent growth), your $36k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 9.0% vs local median 4.4% in Indianapolis city (balance) — 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.
• This rent runs 33% of the median local income ($49k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.