605 Orchard St

Macomb, IL 61455

$450,000B-

None bd · None ba · 7,200 sqft · Built 2006 · MultiFamily · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,213/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$1,250
• HOA: −$0
• Vac / Maint / Mgmt: −$1,725
• Net cashflow: $2,878/mo
• Annual: $34,541/yr
• Cap rate: 13.97%
• Cash-on-cash: 27.41%
• DSCR: 2.22
• 1% rule: 1.83%
• Cash to close: $126,000

Investor read

• This is a 7×3bd/1ba + 1×2bd/1ba + 1×1bd/1ba units multifamily listed at $450k.
• At list price, monthly cash flow is $3k ($35k/yr) — positive. Per door: $288/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $450k).
• It's been on market 19 days — a 2% lower offer ($443k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $443k (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 70/100 on livability (#379 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing B; Watch: schools D, crime D, amenities D.
• Macomb CUSD 185 (town): math 19% / reading 26% proficiency, ranked #410 of 620 in IL (top 66%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: property tax is 2.8% of price.
• Market conditions: 140 active listings in the ZIP.
• 3 sale attempts since 4y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $126k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.0% vs local median 6.0% in Macomb — 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 $8,213/mo this rent would consume 202% of the median local household income ($49k/yr) (locally 1062% 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?
• 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 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 D 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.
• 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.