1238 E 145th St

East Cleveland, OH 44112

$40,000D

4 bd · 2.0 ba · 1,992 sqft · Built 1916 · MultiFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,843/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$146
• HOA: −$0
• Vac / Maint / Mgmt: −$387
• Net cashflow: $1,101/mo
• Annual: $13,208/yr
• Cap rate: 39.31%
• Cash-on-cash: 117.93%
• DSCR: 6.25
• 1% rule: 4.61%
• Cash to close: $11,200

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $40k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $550/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $40k).
• It's been on market 27 days — a 2% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $277 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#650 in OH) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: schools F, crime F, employment F.
• East Cleveland City School District (suburban): math 4% / reading 17% proficiency, ranked #652 of 656 in OH (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 92% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 3.9% of price; built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.2%/yr); 101 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 1,441 units permitted in Cuyahoga County in 2024 (700 in 5+ unit buildings).
• Cuyahoga County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 5.2% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 39.3% vs local median 17.4% in East Cleveland — 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 $1,843/mo this rent would consume 77% of the median local household income ($29k/yr) (locally 1702% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 1916 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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?
• 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?