510 N 7th St

Klamath Falls, OR 97601

$219,000C-

7 bd · 3.0 ba · 2,288 sqft · Built 1924 · SingleFamily · Active · 129 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,976/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$230
• HOA: −$0
• Vac / Maint / Mgmt: −$415
• Net cashflow: $182/mo
• Annual: $2,184/yr
• Cap rate: 7.29%
• Cash-on-cash: 3.56%
• DSCR: 1.16
• 1% rule: 0.90%
• Cash to close: $61,320

Investor read

• This is a 7-bed/3.0-bath single-family listed at $219k.
• At list price, monthly cash flow is $182 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $198k (9.8% below list).
• It's been on market 129 days — a 12% lower offer ($193k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#67 in OR, #2,703 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D-, crime F, employment F.
• Klamath Falls City Schools (town): math 26% / reading 40% proficiency, ranked #36 of 58 in OR (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1924 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.1%/yr); 493 active listings in the ZIP; 232 units permitted in Klamath County in 2024 (72 in 5+ unit buildings).
• Klamath County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 4y ago; this cycle's ask has dropped $20k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $145k; list at $219k implies a 51% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.3% vs local median 3.4% in Klamath Falls — 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 $1,976/mo this rent would consume 46% of the median local household income ($52k/yr) (locally 1323% 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 129 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1924 — 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.
• 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.
• 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.