1014 Sedgefield St

Durham, NC 27705

$329,900D

2 bd · 2.0 ba · 900 sqft · Built 1985 · MultiFamily · Active · 146 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,803/mo
• Mortgage (P&I): −$1,730
• Tax + insurance: −$532
• HOA: −$0
• Vac / Maint / Mgmt: −$589
• Net cashflow: $-48/mo
• Annual: $-570/yr
• Cap rate: 6.36%
• Cash-on-cash: 0.25%
• DSCR: 1.01
• 1% rule: 0.85%
• Cash to close: $92,372

Investor read

• This is a 2 × 2-bed/2.0-bath units multifamily listed at $330k.
• At list price, monthly cash flow is $-48 ($-570/yr) — negative. Per door: $-24/mo.
• To cash-flow at today's rent, offer at most $322k (2.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $280k (15.0% below list).
• It's been on market 146 days — a 12% lower offer ($290k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $280k (15.0% 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 $10k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#15 in NC, #1,411 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Durham Public Schools (urban): math 29% / reading 39% proficiency, ranked #132 of 178 in NC (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Riverside High (math 49% / reading 42%, grade D-, #347 of 535 statewide, top 65%, 1,812 students, 51% FRL).
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+3.0%/yr); 257 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 2,905 units permitted in Durham County in 2024 (955 in 5+ unit buildings).
• Durham County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 2y ago; this cycle's ask has dropped $20k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe flood risk; major wind risk, 27% 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 6.4% vs local median 3.0% in Durham — 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 $2,803/mo this rent would consume 46% of the median local household income ($73k/yr) (locally 3406% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 146 days. Have you received any prior offers? Is the seller open to a 15% 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?