639 W Ocean View Ave

Norfolk, VA 23503

$995,000C-

18 bd · 24.0 ba · 3,240 sqft · Built 1961 · MultiFamily · Under Contract · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,993/mo
• Mortgage (P&I): −$5,218
• Tax + insurance: −$1,286
• HOA: −$0
• Vac / Maint / Mgmt: −$1,889
• Net cashflow: $601/mo
• Annual: $7,212/yr
• Cap rate: 7.53%
• Cash-on-cash: 4.43%
• DSCR: 1.20
• 1% rule: 0.90%
• Cash to close: $278,600

Investor read

• This is a 6 × 3-bed/4.0-bath units multifamily listed at $995k.
• At list price, monthly cash flow is $601 ($7k/yr) — positive. Per door: $100/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 $899k (9.6% below list).
• It's been on market 70 days — a 6% lower offer ($935k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $899k (9.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ocean View Elementary (math 20% / reading 53%, grade F, #953 of 1,108 statewide, top 86%, 456 students, 98% FRL); Granby High (math 33% / reading 80%, grade C, #270 of 319 statewide, top 86%, 1,837 students, 94% FRL) — zoned schools average 96% FRL vs 59% district-wide (37 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents rising fast (+4.8%/yr); 192 active listings in the ZIP; 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• Current owner paid $395k; list at $995k implies a 152% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.5% vs local median 4.0% in Norfolk — 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 $8,993/mo this rent would consume 160% of the median local household income ($68k/yr) (locally 1948% 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 70 days. Have you received any prior offers? Is the seller open to a 10% 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 1961 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 A-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?