224 W 26th St

Norfolk, VA 23517

$170,000B+

5 bd · 2.0 ba · 1,911 sqft · Built 1905 · MultiFamily · Under Contract · 213 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,626/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$229
• HOA: −$0
• Vac / Maint / Mgmt: −$761
• Net cashflow: $1,744/mo
• Annual: $20,924/yr
• Cap rate: 18.60%
• Cash-on-cash: 43.96%
• DSCR: 2.96
• 1% rule: 2.13%
• Cash to close: $47,600

Investor read

• This is a 1×4bd/1.0ba + 1×3bd/1.0ba units multifamily listed at $170k.
• At list price, monthly cash flow is $2k ($21k/yr) — positive. Per door: $872/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $170k).
• It's been on market 213 days — a 12% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k 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.
• Watch-outs: built in 1905 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 30 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $30k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $120k; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.4% rent growth), your $48k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: 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 18.6% 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 $3,626/mo this rent would consume 65% of the median local household income ($67k/yr) (locally 463% 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 213 days. Have you received any prior offers? Is the seller open to a 12% 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 1905 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?