540 Monticello St

Winchester, VA 22601

$605,000D+

9 bd · 3.9 ba · 4,396 sqft · Built 1956 · MultiFamily · Active · 122 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,036/mo
• Mortgage (P&I): −$3,173
• Tax + insurance: −$558
• HOA: −$0
• Vac / Maint / Mgmt: −$1,058
• Net cashflow: $248/mo
• Annual: $2,974/yr
• Cap rate: 6.78%
• Cash-on-cash: 1.76%
• DSCR: 1.08
• 1% rule: 0.83%
• Cash to close: $169,400

Investor read

• This is a 2×2bd/1ba + 1×3bd/1ba units multifamily listed at $605k. Condition is rated good.
• At list price, monthly cash flow is $248 ($3k/yr) — positive. Per door: $83/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $504k (16.8% below list).
• It's been on market 122 days — a 12% lower offer ($532k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $504k (16.8% below list) — sets the bar for 1% rule.
• 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 74/100 on livability (#138 in VA, #4,429 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, schools A-; Watch: commute F.
• Winchester City Public School District (urban): math 52% / reading 62% proficiency, ranked #73 of 131 in VA (top 56%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.6%/yr); 144 active listings in the ZIP; 91 units permitted in Winchester city in 2024 (52 in 5+ unit buildings).
• Winchester County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 2y ago 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.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 3.1% in Winchester — 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 $5,036/mo this rent would consume 94% of the median local household income ($64k/yr) (locally 1627% 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 122 days. Have you received any prior offers? Is the seller open to a 17% 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 1956 — 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?