4224 Spruce Knob Rd

Virginia Beach, VA 23456

$400,000D+

4 bd · 2.5 ba · 1,948 sqft · Built 1986 · SingleFamily · Under Contract · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,949/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$451
• HOA: −$0
• Vac / Maint / Mgmt: −$619
• Net cashflow: $-219/mo
• Annual: $-2,625/yr
• Cap rate: 5.64%
• Cash-on-cash: -2.34%
• DSCR: 0.90
• 1% rule: 0.74%
• Cash to close: $112,000

Investor read

• This is a 4-bed/2.5-bath single-family listed at $400k.
• At list price, monthly cash flow is $-219 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $361k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $295k (26.3% below list).
• It's been on market 17 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $295k (26.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#38 in VA, #880 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, employment A+, housing A+; Watch: cost of living C-, commute F.
• Va Beach City Public School District (urban): math 69% / reading 78% proficiency, ranked #10 of 131 in VA (top 8%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: New Castle Elementary (math 78% / reading 84%, grade A+, #129 of 1,108 statewide, top 12%, 715 students, 26% FRL); Salem High (math 79% / reading 90%, grade A, #23 of 319 statewide, top 8%, 1,650 students, 36% FRL) — zoned schools at 31% FRL track the district average.
• Market conditions: Rents rising (+3.8%/yr); 356 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 666 units permitted in Virginia Beach city in 2024 (347 in 5+ unit buildings).
• Virginia Beach County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $255k; list at $400k implies a 57% gain — meaningful room to come down on a strong offer.
• 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 5.6% vs local median 3.5% in Virginia Beach — 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 A-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?
• 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.