1326 State St

Harrisburg, PA 17103

$399,000B-

25 bd · 25.0 ba · 3,667 sqft · Built 1917 · MultiFamily · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,406/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$637
• HOA: −$0
• Vac / Maint / Mgmt: −$1,135
• Net cashflow: $1,541/mo
• Annual: $18,492/yr
• Cap rate: 11.09%
• Cash-on-cash: 17.15%
• DSCR: 1.76
• 1% rule: 1.35%
• Cash to close: $111,720

Investor read

• This is a 1×2bd/1ba + 4×1bd/1ba units multifamily listed at $399k.
• At list price, monthly cash flow is $2k ($18k/yr) — positive. Per door: $308/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $399k).
• It's been on market 43 days — a 3% lower offer ($387k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $387k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#107 in PA, #826 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D, crime F.
• Harrisburg City SD (urban): math 6% / reading 13% proficiency, ranked #535 of 539 in PA (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Harrisburg Hs (math 24% / reading 10%, grade F, #399 of 437 statewide, top 92%, 1,230 students, 100% FRL) — zoned schools average 100% FRL vs 82% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $56/mo; built in 1917 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.1%/yr); 66 active listings in the ZIP; lower-income renter base — watch delinquency; 540 units permitted in Dauphin County in 2024 (194 in 5+ unit buildings).
• 2 sale attempts since 14y 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 $100k; list at $399k implies a 299% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $112k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.1% vs local median 6.7% in Harrisburg — 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 $5,406/mo this rent would consume 163% of the median local household income ($40k/yr) (locally 1014% 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 43 days. Have you received any prior offers? Is the seller open to a 3% 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 1917 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.