120 W 5th St

Anderson, IN 46016

$165,000B-

3 bd · 1.5 ba · 2,544 sqft · Built 1876 · MultiFamily · Active · 181 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,113/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$198
• HOA: −$0
• Vac / Maint / Mgmt: −$444
• Net cashflow: $606/mo
• Annual: $7,267/yr
• Cap rate: 10.70%
• Cash-on-cash: 15.73%
• DSCR: 1.70
• 1% rule: 1.28%
• Cash to close: $46,200

Investor read

• This is a 2 × 2-bed/?-bath units multifamily listed at $165k.
• At list price, monthly cash flow is $606 ($7k/yr) — positive. Per door: $303/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $165k).
• It's been on market 181 days — a 12% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $145k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#521 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools F, crime D-, amenities F.
• Anderson Community School Corporation (urban): math 15% / reading 23% proficiency, ranked #280 of 301 in IN (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1876 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.9%/yr); 185 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 184 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 9 sale attempts since 27y ago; this cycle's ask has dropped $15k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $10k; list at $165k implies a 1471% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 7.9% rent growth), your $46k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 10.7% vs local median 6.5% in Anderson — 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 $2,113/mo this rent would consume 70% of the median local household income ($36k/yr) (locally 1193% 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 181 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 1876 — 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.
• Schools are F-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?