516 Kohn St

Norristown, PA 19401

$259,900C+

2 bd · 2.0 ba · 1,440 sqft · Built 1895 · MultiFamily · Pending · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,635/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$384
• HOA: −$0
• Vac / Maint / Mgmt: −$763
• Net cashflow: $1,124/mo
• Annual: $13,492/yr
• Cap rate: 11.48%
• Cash-on-cash: 18.54%
• DSCR: 1.82
• 1% rule: 1.40%
• Cash to close: $72,772

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $260k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $562/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $260k).
• It's been on market 26 days — a 2% lower offer ($256k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $256k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#100 in PA, #720 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D-.
• Norristown Area SD (suburban): math 18% / reading 31% proficiency, ranked #466 of 539 in PA (top 86%) — 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.
• Zoned schools: Stewart Ms (math 6% / reading 27%, grade F, #463 of 512 statewide, top 91%, 798 students, 100% FRL); Norristown Area Hs (math 42% / reading 8%, grade F, #375 of 437 statewide, top 86%, 2,309 students, 83% FRL) — zoned schools average 92% FRL vs 70% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1895 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.3%/yr); 166 active listings in the ZIP; 34 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 1,936 units permitted in Montgomery County in 2024 (530 in 5+ unit buildings).
• Montgomery County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 21y 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 $78k; list at $260k implies a 233% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 1.3% rent growth), your $73k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.5% vs local median 4.2% in Norristown — 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.

Questions for listing agent

• 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 1895 — 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 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?
• 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.