325 N Mcdonel St

Lima, OH 45801

$49,500D

4 bd · 2.0 ba · 2,003 sqft · Built 1920 · MultiFamily · Pending · 291 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,278/mo
• Mortgage (P&I): −$260
• Tax + insurance: −$56
• HOA: −$0
• Vac / Maint / Mgmt: −$478
• Net cashflow: $1,484/mo
• Annual: $17,811/yr
• Cap rate: 42.27%
• Cash-on-cash: 128.50%
• DSCR: 6.72
• 1% rule: 4.60%
• Cash to close: $13,860

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $50k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive. Per door: $742/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $50k).
• It's been on market 291 days — a 12% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $342 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#787 in OH) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: crime F, amenities F, commute F.
• Lima City (urban): math 29% / reading 36% proficiency, ranked #575 of 656 in OH (top 88%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 74 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 88 units permitted in Allen County in 2024 (0 in 5+ unit buildings).
• Allen County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $26k (34%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $36k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $14k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 42.3% vs local median 7.7% in Lima — 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.
• At $2,278/mo this rent would consume 53% of the median local household income ($52k/yr) (locally 1141% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 291 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• 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?