The Emerson Twin Home Plan

Madison, WI 53719

$413,400B

3 bd · 2.5 ba · 1,486 sqft · Built — · MultiFamily · Active · 138 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,684/mo
• Mortgage (P&I): −$1,754
• Tax + insurance: −$558
• HOA: −$0
• Vac / Maint / Mgmt: −$984
• Net cashflow: $1,389/mo
• Annual: $16,662/yr
• Cap rate: 11.27%
• Cash-on-cash: 17.79%
• DSCR: 1.79
• 1% rule: 1.40%
• Cash to close: $93,668

Investor read

• This is a 3-bed/2.5-bath multifamily listed at $413k. Condition is rated good.
• At list price, monthly cash flow is $1k ($17k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $413k).
• It's been on market 138 days — a 12% lower offer ($364k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $364k (12.0% 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 $10k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#39 in WI, #819 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: schools C-.
• Verona Area School District (suburban): math 39% / reading 42% proficiency, ranked #113 of 342 in WI (top 33%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+4.0%/yr); 150 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 5,519 units permitted in Dane County in 2024 (3,978 in 5+ unit buildings).
• Dane County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $94k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.3% vs local median 2.4% in Madison — 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 $4,684/mo this rent would consume 61% of the median local household income ($92k/yr) (locally 1237% 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 138 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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.
• 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.