2522 E State St

Rockford, IL 61107

$249,000C-

6 bd · 4.0 ba · 1,800 sqft · Built 1920 · MultiFamily · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,793/mo
• Mortgage (P&I): −$1,306
• Tax + insurance: −$607
• HOA: −$0
• Vac / Maint / Mgmt: −$587
• Net cashflow: $293/mo
• Annual: $3,521/yr
• Cap rate: 7.71%
• Cash-on-cash: 5.05%
• DSCR: 1.22
• 1% rule: 1.12%
• Cash to close: $69,720

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $249k.
• At list price, monthly cash flow is $293 ($4k/yr) — positive. Per door: $147/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $249k).
• It's been on market 25 days — a 2% lower offer ($245k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $245k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#876 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Rockford SD 205 (urban): math 12% / reading 16% proficiency, ranked #533 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Maud E Johnson Elem School (math 8% / reading 12%, grade F, #1,517 of 2,056 statewide, top 78%, 391 students, 0% FRL); Abraham Lincoln Middle School (math 3% / reading 7%, grade F, #636 of 665 statewide, top 98%, 699 students, 0% FRL); Rockford East High School (math 7% / reading 13%, grade F, #528 of 693 statewide, top 82%, 1,718 students, 0% FRL) — zoned schools average 0% FRL vs 73% district-wide (73 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.9%/yr); 157 active listings in the ZIP; solid renter incomes; 285 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $70k; list at $249k implies a 256% gain — meaningful room to come down on a strong offer.
• Cap rate 7.7% vs local median 6.1% in Rockford — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 43% of the median local income ($79k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1920 — 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 F-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?
• 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.