400 W 21st St

Wilmington, DE 19802

$325,000B-

3 bd · 3.0 ba · 2,900 sqft · Built 1919 · MultiFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,648/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$302
• HOA: −$0
• Vac / Maint / Mgmt: −$976
• Net cashflow: $1,666/mo
• Annual: $19,992/yr
• Cap rate: 12.44%
• Cash-on-cash: 21.97%
• DSCR: 1.98
• 1% rule: 1.43%
• Cash to close: $91,000

Investor read

• This is a 2×2bd/1.5ba + 1×1bd/1ba units multifamily listed at $325k.
• At list price, monthly cash flow is $2k ($20k/yr) — positive. Per door: $555/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $325k).
• It's been on market 17 days — a 2% lower offer ($320k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $320k (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 $10k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#52 in DE) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A; Watch: employment D+, schools D, commute D.
• Red Clay Consolidated School District (suburban): math 27% / reading 42% proficiency, ranked #12 of 26 in DE (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1919 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.7%/yr); 119 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 1,367 units permitted in New Castle County in 2024 (201 in 5+ unit buildings).
• New Castle County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $155k; list at $325k implies a 110% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.7% rent growth), your $91k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.4% vs local median 5.6% in Wilmington — 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 $4,648/mo this rent would consume 104% of the median local household income ($54k/yr) (locally 1816% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1919 — 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 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 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?
• 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.