145 S Prospect St

Hagerstown, MD 21740

$199,900D

4 bd · 2.0 ba · 8,868 sqft · Built 1885 · MultiFamily · Active · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,533/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$222
• HOA: −$0
• Vac / Maint / Mgmt: −$1,792
• Net cashflow: $5,471/mo
• Annual: $65,648/yr
• Cap rate: 39.13%
• Cash-on-cash: 117.29%
• DSCR: 6.22
• 1% rule: 4.27%
• Cash to close: $55,972

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $200k.
• At list price, monthly cash flow is $5k ($66k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $200k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#83 in MD, #3,170 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: schools C-, crime F, employment F.
• Washingtion County Public Schools (suburban): math 18% / reading 33% proficiency, ranked #13 of 24 in MD (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1885 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 368 active listings in the ZIP; 232 units permitted in Washington County in 2024 (12 in 5+ unit buildings).
• 2 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 $131k; list at $200k implies a 53% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $56k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 39.1% vs local median 4.4% in Hagerstown — 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 $8,533/mo this rent would consume 163% of the median local household income ($63k/yr) (locally 2832% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1885 — 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.
• 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.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.