2126 Chestnut Ave

Newport News, VA 23607

$95,000B+

3 bd · 1.5 ba · 1,189 sqft · Built 1966 · SingleFamily · Under Contract · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,591/mo
• Mortgage (P&I): −$498
• Tax + insurance: −$169
• HOA: −$0
• Vac / Maint / Mgmt: −$334
• Net cashflow: $590/mo
• Annual: $7,080/yr
• Cap rate: 13.75%
• Cash-on-cash: 26.62%
• DSCR: 2.18
• 1% rule: 1.67%
• Cash to close: $26,600

Investor read

• This is a 3-bed/1.5-bath single-family listed at $95k.
• At list price, monthly cash flow is $590 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $95k).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-0.8%/yr); year-one equity from $657 of loan paydown is wiped out by about $798 of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in VA, #4,018 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living A, housing A; Watch: crime F, commute F.
• Newport News City Public School District (urban): math 34% / reading 54% proficiency, ranked #112 of 131 in VA (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Newsome Park Elementary (math 8% / reading 21%, grade F, #1,104 of 1,108 statewide, top 100%, 477 students, 91% FRL); Huntington Middle (math 2% / reading 27%, grade F, #341 of 342 statewide, top 100%, 411 students, 87% FRL); Heritage High (math 49% / reading 67%, grade C, #262 of 319 statewide, top 82%, 1,111 students, 85% FRL) — zoned schools average 88% FRL vs 55% district-wide (33 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 29% at this address vs 44% district-wide (-15 pts) — the specific schools serving this property underperform the Newport News City Public School District average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising (+2.9%/yr); 130 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 522 units permitted in Newport News city in 2024 (458 in 5+ unit buildings).
• Newport News County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $13k; list at $95k implies a 631% gain — meaningful room to come down on a strong offer.
• At projected returns (-0.8% appreciation + 2.9% rent growth), your $27k cash investment doubles in ~4 years — after that, you're playing with house money.
• 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 13.7% vs local median 4.2% in Newport News — 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 $1,591/mo this rent would consume 45% of the median local household income ($42k/yr) (locally 2008% 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 1966 — 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 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.