3216 Spartan #40

Olney, MD 20832

$239,000C-

3 bd · 1.5 ba · 996 sqft · Built 1973 · Condo · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,955/mo
• Mortgage (P&I): −$1,253
• Tax + insurance: −$231
• HOA: −$622
• Vac / Maint / Mgmt: −$621
• Net cashflow: $228/mo
• Annual: $2,737/yr
• Cap rate: 7.44%
• Cash-on-cash: 4.09%
• DSCR: 1.18
• 1% rule: 1.24%
• Cash to close: $66,920

Investor read

• This is a 3-bed/1.5-bath condo listed at $239k.
• At list price, monthly cash flow is $228 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $239k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#40 in MD, #1,468 nationally) — a professional / high-income tenant draw. Strengths: employment A+, housing A+, health & safety A; Watch: cost of living F.
• Montgomery County Public Schools (suburban): math 27% / reading 45% proficiency, ranked #3 of 24 in MD (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Sherwood Elementary (math 33% / reading 38%, grade F, #136 of 860 statewide, top 16%, 521 students, 27% FRL); William H. Farquhar Middle (math 15% / reading 53%, grade F, #51 of 225 statewide, top 23%, 674 students, 32% FRL); James Hubert Blake High (math 47% / reading 65%, grade C, #83 of 222 statewide, top 38%, 1,784 students, 59% FRL).
• Watch-outs: HOA is 21% of rent.
• Market conditions: 82 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 3,880 units permitted in Montgomery County in 2024 (2,054 in 5+ unit buildings).
• Montgomery County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 4y ago 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.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% vs local median 2.9% in Olney — 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

• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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.