172-174 W Main St

Leola, PA 17540

$475,000B-

3 bd · 3.5 ba · 2,710 sqft · Built 1920 · MultiFamily · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,069/mo
• Mortgage (P&I): −$2,491
• Tax + insurance: −$686
• HOA: −$0
• Vac / Maint / Mgmt: −$1,274
• Net cashflow: $1,618/mo
• Annual: $19,414/yr
• Cap rate: 10.38%
• Cash-on-cash: 14.60%
• DSCR: 1.65
• 1% rule: 1.28%
• Cash to close: $133,000

Investor read

• This is a 3×2bd/1.0ba + 1×1bd/1.0ba units multifamily listed at $475k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $404/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $475k).
• It's been on market 20 days — a 2% lower offer ($468k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $468k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#646 in PA) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A, crime A-; Watch: amenities F, commute F.
• Conestoga Valley SD (suburban): math 43% / reading 59% proficiency, ranked #156 of 539 in PA (top 29%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Leola El Sch (math 22% / reading 47%, grade F, #1,049 of 1,518 statewide, top 71%, 327 students, 63% FRL); Gerald G Huesken Ms (math 35% / reading 55%, grade D, #187 of 512 statewide, top 38%, 965 students, 50% FRL); Conestoga Valley Shs (math 75% / reading 24%, grade D+, #135 of 437 statewide, top 31%, 1,282 students, 41% FRL) — zoned schools average 51% FRL vs 27% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 26 active listings in the ZIP; solid renter incomes; 1,093 units permitted in Lancaster County in 2024 (201 in 5+ unit buildings).
• Lancaster County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 17y 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.
• Current owner paid $350k; 36% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $133k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.4% vs local median 3.2% in Leola — 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

• 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 1920 — 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 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?
• 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.