15 Cotton Pl

Portsmouth, VA 23702

$189,900A

6 bd · 2.0 ba · 2,110 sqft · Built 1928 · MultiFamily · Under Contract · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,560/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$348
• HOA: −$0
• Vac / Maint / Mgmt: −$538
• Net cashflow: $679/mo
• Annual: $8,150/yr
• Cap rate: 11.00%
• Cash-on-cash: 16.83%
• DSCR: 1.75
• 1% rule: 1.35%
• Cash to close: $53,172

Investor read

• This is a 6-bed/2.0-bath multifamily listed at $190k.
• At list price, monthly cash flow is $679 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $190k).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $20k of equity ($1k loan paydown + $19k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo; built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+4.0%/yr); 64 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 5 sale attempts; this cycle's ask has dropped $15k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 4.0% rent growth), your $53k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.0% vs local median 4.6% in Portsmouth — 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 $2,560/mo this rent would consume 63% of the median local household income ($49k/yr) (locally 534% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1928 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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.