1355-1357 University Dr

State College, PA 16801

$425,000D

4 bd · 2.0 ba · 1,769 sqft · Built 1970 · MultiFamily · Pending

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,496/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$628
• HOA: −$0
• Vac / Maint / Mgmt: −$734
• Net cashflow: $-95/mo
• Annual: $-1,143/yr
• Cap rate: 6.02%
• Cash-on-cash: -0.96%
• DSCR: 0.96
• 1% rule: 0.82%
• Cash to close: $119,000

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $425k.
• At list price, monthly cash flow is $-95 ($-1k/yr) — negative. Per door: $-48/mo.
• To cash-flow at today's rent, offer at most $408k (4.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $350k (17.7% below list).
• Only 0 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $350k (17.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#29 in PA, #164 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: employment C-, cost of living C-.
• State College Area SD (urban): math 62% / reading 73% proficiency, ranked #41 of 539 in PA (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 15% free/reduced lunch — higher-income household profile.
• Zoned schools: Easterly Parkway El Sch (math 57% / reading 67%, grade B, #313 of 1,518 statewide, top 24%, 316 students, 37% FRL); Mount Nittany Ms (math 40% / reading 72%, grade B-, #69 of 512 statewide, top 14%, 695 students, 20% FRL); State College Area Hs (math 90% / reading 24%, grade C, #86 of 437 statewide, top 20%, 2,410 students, 20% FRL).
• Market conditions: Rents rising (+2.8%/yr); 162 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 399 units permitted in Centre County in 2024 (44 in 5+ unit buildings).
• Centre County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.0% vs local median 1.7% in State College — 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 $3,496/mo this rent would consume 68% of the median local household income ($62k/yr) (locally 3590% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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 1970 — 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?
• 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?
• 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.