109 S 3rd Ave

Beech Grove, IN 46107

$120,000D

2 bd · 1.0 ba · 677 sqft · Built 1940 · SingleFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,010/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$210
• HOA: −$0
• Vac / Maint / Mgmt: −$212
• Net cashflow: $-42/mo
• Annual: $-507/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.51%
• DSCR: 0.93
• 1% rule: 0.84%
• Cash to close: $33,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $-42 ($-507/yr) — negative.
• To cash-flow at today's rent, offer at most $113k (6.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $101k (15.9% below list).
• It's been on market 38 days — a 3% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $101k (15.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#418 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Beech Grove City Schools (suburban): math 17% / reading 29% proficiency, ranked #269 of 301 in IN (top 89%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Hornet Park Elementary School (456 students, 75% FRL); Beech Grove Middle School (math 13% / reading 24%, grade F, #276 of 330 statewide, top 84%, 476 students, 78% FRL); Beech Grove Sr High School (math 17% / reading 47%, grade F, #295 of 369 statewide, top 82%, 918 students, 71% FRL) — zoned schools average 75% FRL vs 58% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 75 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% 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.
• 4 sale attempts since 23y 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 $36k; list at $120k implies a 233% gain — meaningful room to come down on a strong offer.
• Cap rate 5.9% vs local median 4.4% in Beech Grove — 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 38 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• 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.