225 E Donald St

South Bend, IN 46613

$85,000C+

6 bd · 2.0 ba · 1,728 sqft · Built 1925 · MultiFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,217/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$76
• HOA: −$0
• Vac / Maint / Mgmt: −$466
• Net cashflow: $1,230/mo
• Annual: $14,760/yr
• Cap rate: 23.66%
• Cash-on-cash: 62.02%
• DSCR: 3.76
• 1% rule: 2.61%
• Cash to close: $23,800

Investor read

• This is a 6-bed/2.0-bath multifamily listed at $85k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 83 days — a 6% lower offer ($80k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $80k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, schools F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 77 active listings in the ZIP; lower-income renter base — watch delinquency; 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $10k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $24k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 23.7% vs local median 4.4% in South Bend — 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 $2,217/mo this rent would consume 63% of the median local household income ($43k/yr) (locally 545% 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 83 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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?
• 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.