2 Merrill Ave

Beverly, MA 01982

$55,000B

1 bd · 1.0 ba · 488 sqft · Built 1900 · SingleFamily · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,795/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$43
• HOA: −$250
• Vac / Maint / Mgmt: −$377
• Net cashflow: $836/mo
• Annual: $10,037/yr
• Cap rate: 24.54%
• Cash-on-cash: 65.18%
• DSCR: 3.90
• 1% rule: 3.26%
• Cash to close: $15,400

Investor read

• This is a 1-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $836 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $55k).
• It's been on market 80 days — a 6% lower offer ($52k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $52k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#158 in MA) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing B+; Watch: amenities F, commute F, cost of living F.
• Hamilton-Wenham (rural): math 56% / reading 76% proficiency, ranked #35 of 302 in MA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 7% free/reduced lunch — higher-income household profile.
• Zoned schools: Miles River Middle (math 62% / reading 78%, grade A, #13 of 305 statewide, top 5%, 371 students, 0% FRL); Hamilton-Wenham Regional High (math 77% / reading 87%, grade A, #33 of 343 statewide, top 11%, 450 students, 0% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 1,032 units permitted in Essex County in 2024 (590 in 5+ unit buildings).
• Essex County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 24.5% vs local median 1.6% in Beverly — 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.

Questions for listing agent

• It's been on market 80 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.