1401 20th St

Rockford, IL 61104

$185,000C

4 bd · 2.0 ba · — sqft · Built 1929 · MultiFamily · Active · 73 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,322/mo
• Mortgage (P&I): −$970
• Tax + insurance: −$349
• HOA: −$0
• Vac / Maint / Mgmt: −$488
• Net cashflow: $515/mo
• Annual: $6,179/yr
• Cap rate: 9.63%
• Cash-on-cash: 11.93%
• DSCR: 1.53
• 1% rule: 1.26%
• Cash to close: $51,800

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $185k.
• At list price, monthly cash flow is $515 ($6k/yr) — positive. Per door: $257/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $185k).
• It's been on market 73 days — a 6% lower offer ($174k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $174k (6.0% 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 $6k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#876 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools F, crime F, amenities F.
• Rockford SD 205 (urban): math 12% / reading 16% proficiency, ranked #533 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1929 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.7%/yr); 69 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 285 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 10 sale attempts since 7y 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 $128k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $52k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 9.6% vs local median 6.1% in Rockford — 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 $2,322/mo this rent would consume 83% of the median local household income ($34k/yr) (locally 1406% 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 73 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 1929 — 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 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?