23 Farragut St

Portsmouth, VA 23702

$525,000C+

None bd · 4.0 ba · 4,188 sqft · Built 1918 · MultiFamily · Under Contract · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,265/mo
• Mortgage (P&I): −$2,753
• Tax + insurance: −$659
• HOA: −$0
• Vac / Maint / Mgmt: −$1,106
• Net cashflow: $747/mo
• Annual: $8,968/yr
• Cap rate: 8.00%
• Cash-on-cash: 6.10%
• DSCR: 1.27
• 1% rule: 1.00%
• Cash to close: $147,000

Investor read

• This is a ?-bed/4.0-bath multifamily listed at $525k.
• At list price, monthly cash flow is $747 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $525k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $56k of equity ($4k loan paydown + $52k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1918 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+4.0%/yr); 65 active listings in the ZIP; 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 11 sale attempts since 8y 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 $300k; list at $525k implies a 75% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 4.0% rent growth), your $147k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$90k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: 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 8.0% vs local median 4.6% in Portsmouth — 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 $5,265/mo this rent would consume 129% of the median local household income ($49k/yr) (locally 534% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1918 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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?
• 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.