5144 Castle Way

Portsmouth, VA 23703

$200,000D-

2 bd · 1.5 ba · 980 sqft · Built 1983 · Townhouse · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,655/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$268
• HOA: −$0
• Vac / Maint / Mgmt: −$348
• Net cashflow: $-9/mo
• Annual: $-109/yr
• Cap rate: 6.24%
• Cash-on-cash: -0.19%
• DSCR: 0.99
• 1% rule: 0.83%
• Cash to close: $56,000

Investor read

• This is a 2-bed/1.5-bath townhouse listed at $200k.
• At list price, monthly cash flow is $-9 ($-109/yr) — negative.
• To cash-flow at today's rent, offer at most $198k (0.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $166k (17.2% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $166k (17.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• 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.
• Zoned schools: Churchland Elementary (math 47% / reading 72%, grade B-, #536 of 1,108 statewide, top 51%, 767 students, 98% FRL); Churchland Middle (math 53% / reading 77%, grade A-, #120 of 342 statewide, top 35%, 890 students, 100% FRL); Churchland High (math 48% / reading 80%, grade B-, #220 of 319 statewide, top 70%, 1,435 students, 100% FRL) — zoned schools average 99% FRL vs 60% district-wide (39 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 63% at this address vs 46% district-wide (+17 pts) — the actual schools serving this property are materially stronger than the Portsmouth City Public School District average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: 124 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 2 sale attempts since 2y 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.
• Climate carrying-cost: moderate flood risk; 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 6.2% 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.

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?
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.