2027 E Washington Ave

Madison, WI 53704

$650,000C+

3 bd · 4.0 ba · 2,068 sqft · Built 1904 · MultiFamily · Active · 50 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,812/mo
• Mortgage (P&I): −$3,409
• Tax + insurance: −$966
• HOA: −$0
• Vac / Maint / Mgmt: −$1,431
• Net cashflow: $1,007/mo
• Annual: $12,082/yr
• Cap rate: 8.15%
• Cash-on-cash: 6.64%
• DSCR: 1.30
• 1% rule: 1.05%
• Cash to close: $182,000

Investor read

• This is a 1×2bd/1ba + 3×1bd/1ba units multifamily listed at $650k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive. Per door: $252/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $650k).
• It's been on market 50 days — a 3% lower offer ($630k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $630k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#39 in WI, #819 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+.
• Madison Metropolitan School District (urban): math 35% / reading 40% proficiency, ranked #193 of 342 in WI (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: East High (math 32% / reading 42%, grade F, #123 of 483 statewide, top 28%, 1,649 students, 55% FRL).
• Watch-outs: built in 1904 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 141 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); 5,519 units permitted in Dane County in 2024 (3,978 in 5+ unit buildings).
• Dane County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 8.2% vs local median 2.4% in Madison — 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 $6,812/mo this rent would consume 110% of the median local household income ($74k/yr) (locally 2064% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 50 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Built in 1904 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.