1315 Little Bay Ave

Norfolk, VA 23503

$1,500,000B-

None bd · None ba · 9,334 sqft · Built 1979 · MultiFamily · Active · 154 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,500/mo
• Mortgage (P&I): −$7,866
• Tax + insurance: −$2,145
• HOA: −$0
• Vac / Maint / Mgmt: −$3,885
• Net cashflow: $4,604/mo
• Annual: $55,245/yr
• Cap rate: 10.32%
• Cash-on-cash: 14.37%
• DSCR: 1.64
• 1% rule: 1.23%
• Cash to close: $420,000

Investor read

• This is a 12 × 2-bed/1-bath units multifamily listed at $1.50M.
• At list price, monthly cash flow is $5k ($55k/yr) — positive. Per door: $384/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.50M).
• It's been on market 154 days — a 12% lower offer ($1.32M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.32M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents rising fast (+4.8%/yr); 198 active listings in the ZIP; 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• Current owner paid $899k; list at $1.50M implies a 67% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.8% rent growth), your $420k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); 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 10.3% vs local median 4.0% in Norfolk — 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 $18,500/mo this rent would consume 328% of the median local household income ($68k/yr) (locally 1948% 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 154 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 1979 — 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?
• 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 A-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?