225 Harwood St

Elyria, OH 44035

$65,000B+

3 bd · 2.0 ba · 1,728 sqft · Built 1926 · MultiFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,267/mo
• Mortgage (P&I): −$341
• Tax + insurance: −$229
• HOA: −$0
• Vac / Maint / Mgmt: −$476
• Net cashflow: $1,221/mo
• Annual: $14,652/yr
• Cap rate: 28.83%
• Cash-on-cash: 80.51%
• DSCR: 4.58
• 1% rule: 3.49%
• Cash to close: $18,200

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $65k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive. Per door: $611/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $65k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $449 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#243 in OH, #3,869 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A; Watch: schools C-, employment D, commute F.
• Elyria City Schools (urban): math 21% / reading 37% proficiency, ranked #586 of 656 in OH (top 89%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: property tax is 3.7% of price; built in 1926 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.7%/yr); 360 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,098 units permitted in Lorain County in 2024 (20 in 5+ unit buildings).
• 2 sale attempts since 10y 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.
• Current owner paid $45k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.7% rent growth), your $18k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 28.8% vs local median 4.0% in Elyria — 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 $2,267/mo this rent would consume 48% of the median local household income ($56k/yr) (locally 2229% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1926 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.