2761 Red Lion Pl

Waldorf, MD 20602

$225,000C+

3 bd · 1.5 ba · 1,056 sqft · Built 1979 · Townhouse · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,553/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$359
• HOA: −$55
• Vac / Maint / Mgmt: −$536
• Net cashflow: $423/mo
• Annual: $5,080/yr
• Cap rate: 8.55%
• Cash-on-cash: 8.06%
• DSCR: 1.36
• 1% rule: 1.13%
• Cash to close: $63,000

Investor read

• This is a 3-bed/1.5-bath townhouse listed at $225k.
• At list price, monthly cash flow is $423 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $225k).
• It's been on market 16 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $222k (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 72/100 on livability (#141 in MD) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, housing A+; Watch: schools D+, crime D-, amenities F.
• Charles County Public Schools (suburban): math 13% / reading 29% proficiency, ranked #14 of 24 in MD (top 58%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 93 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,542 units permitted in Charles County in 2024 (516 in 5+ unit buildings).
• Charles County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 25y ago; this cycle's ask has dropped $74k (25%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: moderate wind risk, 25% 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 8.6% vs local median 4.8% in Waldorf — 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

• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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 D 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.
• 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.