1304 Blue Heron Dr

Denton, MD 21629

$220,000D+

3 bd · 2.5 ba · 1,560 sqft · Built 2004 · Townhouse · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,000/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$333
• HOA: −$104
• Vac / Maint / Mgmt: −$420
• Net cashflow: $-10/mo
• Annual: $-124/yr
• Cap rate: 6.24%
• Cash-on-cash: -0.20%
• DSCR: 0.99
• 1% rule: 0.91%
• Cash to close: $61,600

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $220k.
• At list price, monthly cash flow is $-10 ($-124/yr) — negative.
• To cash-flow at today's rent, offer at most $218k (0.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $200k (9.1% below list).
• It's been on market 20 days — a 2% lower offer ($217k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (9.1% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 65/100 on livability (#260 in MD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities C-, employment D, schools D-.
• Caroline County Public Schools (rural): math 13% / reading 29% proficiency, ranked #17 of 24 in MD (top 71%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 56 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 59 units permitted in Caroline County in 2024 (0 in 5+ unit buildings).
• Caroline County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 8 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 $165k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $62k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 57% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 3.6% in Denton — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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?
• 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.