1 Summerhill Ave

Worcester, MA 01606

$599,900B

9 bd · 3.0 ba · 3,798 sqft · Built 1890 · MultiFamily · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,194/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$791
• HOA: −$0
• Vac / Maint / Mgmt: −$1,511
• Net cashflow: $1,746/mo
• Annual: $20,951/yr
• Cap rate: 9.79%
• Cash-on-cash: 12.47%
• DSCR: 1.55
• 1% rule: 1.20%
• Cash to close: $167,972

Investor read

• This is a 9-bed/3.0-bath multifamily listed at $600k.
• At list price, monthly cash flow is $2k ($21k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $600k).
• It's been on market 24 days — a 2% lower offer ($591k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $591k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Chandler Magnet (math 12% / reading 17%, grade F, #873 of 938 statewide, top 94%, 402 students, 0% FRL); Burncoat Middle School (math 20% / reading 26%, grade F, #243 of 305 statewide, top 80%, 712 students, 0% FRL); Burncoat Senior High (math 22% / reading 37%, grade F, #270 of 343 statewide, top 80%, 1,179 students, 0% FRL) — zoned schools average 0% FRL vs 66% district-wide (66 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 29 active listings in the ZIP; solid renter incomes; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $168k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.8% vs local median 3.8% in Worcester — 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 $7,194/mo this rent would consume 94% of the median local household income ($92k/yr) (locally 634% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1890 — 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.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.