821 Ridgewood Dr Unit 1-2

Berea, KY 40403

$299,999D

6 bd · 5.0 ba · 2,880 sqft · Built 2006 · MultiFamily · Active · 45 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,689/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$500
• HOA: −$0
• Vac / Maint / Mgmt: −$565
• Net cashflow: $51/mo
• Annual: $613/yr
• Cap rate: 6.50%
• Cash-on-cash: 0.73%
• DSCR: 1.03
• 1% rule: 0.90%
• Cash to close: $84,000

Investor read

• This is a 2 × 3-bed/2.5-bath units multifamily listed at $300k. Condition is rated good.
• At list price, monthly cash flow is $51 ($613/yr) — positive. Per door: $26/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $269k (10.4% below list).
• It's been on market 45 days — a 3% lower offer ($291k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $269k (10.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#104 in KY, #4,354 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Madison County (town): math 31% / reading 47% proficiency, ranked #35 of 165 in KY (top 21%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Shannon Johnson Elementary School (math 44% / reading 55%, grade D, #100 of 676 statewide, top 16%, 466 students, 50% FRL); Foley Middle School (math 23% / reading 51%, grade F, #80 of 217 statewide, top 41%, 445 students, 59% FRL); Madison Southern High School (math 32% / reading 42%, grade F, #58 of 254 statewide, top 27%, 1,210 students, 50% FRL).
• Market conditions: 206 active listings in the ZIP; 453 units permitted in Madison County in 2024 (64 in 5+ unit buildings).
• Madison County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts 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: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 3.1% in Berea — 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 $2,689/mo this rent would consume 52% of the median local household income ($62k/yr) (locally 685% 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 45 days. Have you received any prior offers? Is the seller open to a 10% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.