742 S Addison St

Indianapolis city (balance), IN 46221

$79,000B-

2 bd · 0.5 ba · 832 sqft · Built 1910 · SingleFamily · Pending · 72 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,295/mo
• Mortgage (P&I): −$414
• Tax + insurance: −$173
• HOA: −$0
• Vac / Maint / Mgmt: −$272
• Net cashflow: $435/mo
• Annual: $5,221/yr
• Cap rate: 12.90%
• Cash-on-cash: 23.60%
• DSCR: 2.05
• 1% rule: 1.64%
• Cash to close: $22,120

Investor read

• This is a 2-bed/0.5-bath single-family listed at $79k.
• At list price, monthly cash flow is $435 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $79k).
• It's been on market 72 days — a 6% lower offer ($74k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $74k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $546 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Indianapolis Public Schools (urban): math 14% / reading 20% proficiency, ranked #286 of 301 in IN (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: William Penn School 49 (math 9% / reading 9%, grade F, #935 of 994 statewide, top 94%, 509 students, 78% FRL); H L Harshman Middle School (math 3% / reading 16%, grade F, #316 of 330 statewide, top 96%, 549 students, 84% FRL); George Washington High School (math 2% / reading 17%, grade F, #366 of 369 statewide, top 99%, 753 students, 68% FRL) — zoned schools at 77% FRL track the district average.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.8%/yr); 43 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); 1,906 units permitted in Marion County in 2024 (621 in 5+ unit buildings).
• Marion County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $22k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 12.9% vs local median 4.4% in Indianapolis city (balance) — 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 72 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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.
• 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.