405-419 E Mill St #14

Carbondale, IL 62901

$720,000B-

27 bd · 13.5 ba · 14,400 sqft · Built 2008 · MultiFamily · Pending · 156 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,583/mo
• Mortgage (P&I): −$3,776
• Tax + insurance: −$1,200
• HOA: −$0
• Vac / Maint / Mgmt: −$2,012
• Net cashflow: $2,595/mo
• Annual: $31,138/yr
• Cap rate: 10.62%
• Cash-on-cash: 15.45%
• DSCR: 1.69
• 1% rule: 1.33%
• Cash to close: $201,600

Investor read

• This is a 9 × 3-bed/?-bath units multifamily listed at $720k.
• At list price, monthly cash flow is $3k ($31k/yr) — positive. Per door: $288/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($10k rent vs $720k).
• It's been on market 156 days — a 12% lower offer ($634k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $634k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $22k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#375 in IL) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: housing C-, schools D+, crime F.
• Carbondale Chsd 165 (urban): math 26% / reading 35% proficiency, ranked #279 of 620 in IL (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+4.5%/yr); 202 active listings in the ZIP; lower-income renter base — watch delinquency; 5 units permitted in Jackson County in 2024 (0 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $202k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.6% vs local median 4.9% in Carbondale — 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 $9,583/mo this rent would consume 328% of the median local household income ($35k/yr) (locally 2038% 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 156 days. Have you received any prior offers? Is the seller open to a 12% 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?
• 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?
• 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.