328-330 W Mechanic St

Shelbyville, IN 46176

$79,000B-

3 bd · 2.5 ba · 2,376 sqft · Built 1910 · MultiFamily · Pending · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,033/mo
• Mortgage (P&I): −$414
• Tax + insurance: −$286
• HOA: −$0
• Vac / Maint / Mgmt: −$427
• Net cashflow: $906/mo
• Annual: $10,866/yr
• Cap rate: 20.05%
• Cash-on-cash: 49.12%
• DSCR: 3.19
• 1% rule: 2.57%
• Cash to close: $22,120

Investor read

• This is a 2 × 2-bed/1.5-bath units multifamily listed at $79k.
• At list price, monthly cash flow is $906 ($11k/yr) — positive. Per door: $453/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $79k).
• It's been on market 69 days — a 6% lower offer ($74k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $74k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $546 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#450 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B; Watch: employment C-, amenities F, commute F.
• Shelbyville Central Schools (town): math 40% / reading 39% proficiency, ranked #148 of 301 in IN (top 49%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Thomas A Hendricks Elementary Sch (math 49% / reading 39%, grade F, #408 of 994 statewide, top 41%, 533 students, 66% FRL); Shelbyville Middle School (math 37% / reading 39%, grade F, #136 of 330 statewide, top 44%, 882 students, 62% FRL); Shelbyville Sr High School (math 31% / reading 60%, grade D-, #164 of 369 statewide, top 45%, 1,101 students, 57% FRL) — zoned schools average 62% FRL vs 46% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 3.8% of price; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 238 active listings in the ZIP; 285 units permitted in Shelby County in 2024 (147 in 5+ unit buildings).
• Shelby County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 23y ago; this cycle's ask has dropped $41k (34%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 20.0% vs local median 4.0% in Shelbyville — 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.
• This rent runs 37% of the median local income ($65k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 69 days. Have you received any prior offers? Is the seller open to a 6% 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 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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?