26 S State St

Dover, DE 19901

$1,200,000B-

81 bd · None ba · 4,984 sqft · Built 1900 · MultiFamily · Active · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $15,602/mo
• Mortgage (P&I): −$6,293
• Tax + insurance: −$893
• HOA: −$0
• Vac / Maint / Mgmt: −$3,276
• Net cashflow: $5,140/mo
• Annual: $61,676/yr
• Cap rate: 11.43%
• Cash-on-cash: 18.36%
• DSCR: 1.82
• 1% rule: 1.30%
• Cash to close: $336,000

Investor read

• This is a 9 × 2-bed/1-bath units multifamily listed at $1.20M.
• At list price, monthly cash flow is $5k ($62k/yr) — positive. Per door: $571/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($16k rent vs $1.20M).
• It's been on market 81 days — a 6% lower offer ($1.13M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.13M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $36k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#38 in DE) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: crime F, commute F, employment D-.
• Capital School District (urban): math 14% / reading 31% proficiency, ranked #24 of 26 in DE (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Booker T. Washington Elementary School (math 27% / reading 42%, grade F, #34 of 105 statewide, top 37%, 334 students, 0% FRL); Central Middle School (math 12% / reading 31%, grade F, #27 of 36 statewide, top 77%, 860 students, 0% FRL); Dover High School (math 21% / reading 45%, grade F, #22 of 40 statewide, top 56%, 1,771 students, 0% FRL) — zoned schools average 0% FRL vs 56% district-wide (56 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.0%/yr); 190 active listings in the ZIP; 1,201 units permitted in Kent County in 2024 (116 in 5+ unit buildings).
• Kent County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $900k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 2.0% rent growth), your $336k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 11.4% vs local median 5.2% in Dover — 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 $15,602/mo this rent would consume 282% of the median local household income ($66k/yr) (locally 1320% 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 81 days. Have you received any prior offers? Is the seller open to a 6% 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 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.