2005 Summer (-2045) St SE

Salem, OR 97302

$1,100,000D

40 bd · 30.0 ba · 3,900 sqft · Built 1972 · MultiFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,166/mo
• Mortgage (P&I): −$5,769
• Tax + insurance: −$938
• HOA: −$0
• Vac / Maint / Mgmt: −$2,135
• Net cashflow: $1,325/mo
• Annual: $15,897/yr
• Cap rate: 7.74%
• Cash-on-cash: 5.16%
• DSCR: 1.23
• 1% rule: 0.92%
• Cash to close: $308,000

Investor read

• This is a 5 × 8-bed/?-bath units multifamily listed at $1.10M.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $265/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.02M (7.6% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $1.02M (7.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $33k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#59 in OR, #2,084 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, crime F.
• Salem-Keizer SD 24J (urban): math 34% / reading 47% proficiency, ranked #103 of 183 in OR (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.8%/yr); 242 active listings in the ZIP; solid renter incomes; 1,591 units permitted in Marion County in 2024 (716 in 5+ unit buildings).
• Marion County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $705k; list at $1.10M implies a 56% gain — meaningful room to come down on a strong offer.
• Cap rate 7.7% vs local median 2.9% in Salem — 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 $10,166/mo this rent would consume 142% of the median local household income ($86k/yr) (locally 1754% 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 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?
• 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.