1705 Ocean Bay Dr

Virginia Beach, VA 23454

$244,900D+

2 bd · 2.5 ba · 1,560 sqft · Built 1987 · Condo · Under Contract · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,414/mo
• Mortgage (P&I): −$1,284
• Tax + insurance: −$304
• HOA: −$350
• Vac / Maint / Mgmt: −$507
• Net cashflow: $-31/mo
• Annual: $-374/yr
• Cap rate: 6.14%
• Cash-on-cash: -0.55%
• DSCR: 0.98
• 1% rule: 0.99%
• Cash to close: $68,572

Investor read

• This is a 2-bed/2.5-bath condo listed at $245k.
• At list price, monthly cash flow is $-31 ($-374/yr) — negative.
• To cash-flow at today's rent, offer at most $239k (2.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $241k (1.4% below list).
• It's been on market 43 days — a 3% lower offer ($238k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $238k (3.0% 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 $7k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#38 in VA, #880 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, employment A+, housing A+; Watch: cost of living C-, commute F.
• Va Beach City Public School District (urban): math 69% / reading 78% proficiency, ranked #10 of 131 in VA (top 8%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Corporate Landing Elementary (math 62% / reading 72%, grade B+, #381 of 1,108 statewide, top 36%, 380 students, 57% FRL); Ocean Lakes High (math 73% / reading 89%, grade A, #52 of 319 statewide, top 17%, 1,855 students, 29% FRL).
• Market conditions: Rents rising fast (+6.6%/yr); 203 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 666 units permitted in Virginia Beach city in 2024 (347 in 5+ unit buildings).
• Virginia Beach County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $25k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $186k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 3.5% in Virginia Beach — 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 43 days. Have you received any prior offers? Is the seller open to a 3% 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?
• 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.