1340-1354 Lee St

Salem, OR 97302

$495,000C

None bd · 25.0 ba · 1,624 sqft · Built 1942 · MultiFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,794/mo
• Mortgage (P&I): −$2,596
• Tax + insurance: −$435
• HOA: −$0
• Vac / Maint / Mgmt: −$1,217
• Net cashflow: $1,547/mo
• Annual: $18,561/yr
• Cap rate: 10.20%
• Cash-on-cash: 13.97%
• DSCR: 1.62
• 1% rule: 1.17%
• Cash to close: $138,600

Investor read

• This is a 5 × 1-bed/1-bath units multifamily listed at $495k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $309/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $495k).
• It's been on market 38 days — a 3% lower offer ($480k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $480k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#59 in OR, #2,084 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, crime F.
• Salem-Keizer SD 24J (urban): math 34% / reading 47% proficiency, ranked #103 of 183 in OR (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo; built in 1942 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.8%/yr); 242 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,591 units permitted in Marion County in 2024 (716 in 5+ unit buildings).
• Marion County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $29k; list at $495k implies a 1607% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $139k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.2% vs local median 2.9% in Salem — 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 $5,794/mo this rent would consume 81% of the median local household income ($86k/yr) (locally 1754% 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 38 days. Have you received any prior offers? Is the seller open to a 3% 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 1942 — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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?