274 Paradise Dr

Portsmouth, VA 23701

$247,000D

2 bd · 2.5 ba · 1,544 sqft · Built 2016 · Townhouse · Under Contract · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,048/mo
• Mortgage (P&I): −$1,295
• Tax + insurance: −$349
• HOA: −$216
• Vac / Maint / Mgmt: −$430
• Net cashflow: $-242/mo
• Annual: $-2,908/yr
• Cap rate: 5.12%
• Cash-on-cash: -4.20%
• DSCR: 0.81
• 1% rule: 0.83%
• Cash to close: $69,160

Investor read

• This is a 2-bed/2.5-bath townhouse listed at $247k.
• At list price, monthly cash flow is $-242 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (17.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $205k (17.1% below list).
• It's been on market 41 days — a 3% lower offer ($240k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (17.3% below list) — sets the bar for cash-flow.
• 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 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Victory Elementary (math 37% / reading 57%, grade D-, #794 of 1,108 statewide, top 74%, 589 students, 117% FRL); Cradock Middle (math 32% / reading 62%, grade D+, #257 of 342 statewide, top 77%, 533 students, 100% FRL); Manor High (math 48% / reading 75%, grade B-, #240 of 319 statewide, top 75%, 1,236 students, 99% FRL) — zoned schools average 105% FRL vs 60% district-wide (45 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+11.9%/yr); 170 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 6 sale attempts since 10y 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.
• Climate carrying-cost: severe wind risk, 80% 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.
• This rent runs 39% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 41 days. Have you received any prior offers? Is the seller open to a 17% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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?
• 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.