The Milford - Build On-Your-Lot Plan

Millville, DE 19967

$255,300F

3 bd · 2.0 ba · 1,423 sqft · Built — · SingleFamily · Active · 161 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,332/mo
• Mortgage (P&I): −$2,248
• Tax + insurance: −$770
• HOA: −$0
• Vac / Maint / Mgmt: −$490
• Net cashflow: $-1,176/mo
• Annual: $-14,107/yr
• Cap rate: 3.16%
• Cash-on-cash: -11.20%
• DSCR: 0.50
• 1% rule: 0.54%
• Cash to close: $120,029

Investor read

• This is a 3-bed/2.0-bath single-family listed at $255k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-14k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $233k (8.7% below list).
• It's been on market 161 days — a 12% lower offer ($225k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $225k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-0.8%/yr); year-one equity from $3k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#49 in DE) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A, housing A; Watch: schools F, amenities F, commute F.
• Indian River School District (rural): math 25% / reading 41% proficiency, ranked #14 of 26 in DE (top 54%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 2.5% of price; flood insurance adds $56/mo.
• Market conditions: 127 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.2% vs local median 2.4% in Millville — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 161 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?