125 Lithia Ave

Webster Groves, MO 63119

$207,000C

2 bd · 1.5 ba · 1,120 sqft · Built 1915 · SingleFamily · Pending · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,928/mo
• Mortgage (P&I): −$1,086
• Tax + insurance: −$275
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $162/mo
• Annual: $1,945/yr
• Cap rate: 7.23%
• Cash-on-cash: 3.36%
• DSCR: 1.15
• 1% rule: 0.93%
• Cash to close: $57,960

Investor read

• This is a 2-bed/1.5-bath single-family listed at $207k.
• At list price, monthly cash flow is $162 ($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 $193k (6.9% below list).
• It's been on market 52 days — a 3% lower offer ($201k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (6.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#37 in MO, #3,184 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: cost of living C-, amenities F, commute F.
• Webster Groves (suburban): math 56% / reading 67% proficiency, ranked #7 of 324 in MO (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 159 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals leasing fast (median 9d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 920 units permitted in St. Louis County in 2024 (250 in 5+ unit buildings).
• 5 sale attempts since 6y ago; this cycle's ask has dropped $13k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $145k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $58k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.2% vs local median 2.8% in Webster Groves — 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 52 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• Built in 1915 — 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 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.