NORFOLK Plan

Mount Pleasant, WI 53403

$324,990F

3 bd · 2.5 ba · 1,543 sqft · Built — · MultiFamily · Active · 152 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,812/mo
• Mortgage (P&I): −$1,629
• Tax + insurance: −$518
• HOA: −$0
• Vac / Maint / Mgmt: −$380
• Net cashflow: $-716/mo
• Annual: $-8,587/yr
• Cap rate: 3.53%
• Cash-on-cash: -9.87%
• DSCR: 0.56
• 1% rule: 0.58%
• Cash to close: $86,982

Investor read

• This is a 3-bed/2.5-bath multifamily listed at $325k. Condition is rated good.
• At list price, monthly cash flow is $-716 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $207k (36.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $181k (44.3% below list).
• It's been on market 152 days — a 12% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $181k (44.3% 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 $9k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#38 in WI, #778 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, cost of living A+; Watch: schools D+, amenities F.
• Racine Unified School District (urban): math 12% / reading 20% proficiency, ranked #335 of 342 in WI (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents rising fast (+5.8%/yr); 91 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 505 units permitted in Racine County in 2024 (287 in 5+ unit buildings).
• Racine County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 3.5% vs local median 2.0% in Mount Pleasant — 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.
• This rent runs 36% of the median local income ($60k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 152 days. Have you received any prior offers? Is the seller open to a 44% concession, seller financing, or rate buy-down credit?
• 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?
• 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.