18235 Exchange Ave

Lansing, IL 60438

$384,800B-

4 bd · 4.0 ba · 1,820 sqft · Built 1963 · MultiFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,533/mo
• Mortgage (P&I): −$2,018
• Tax + insurance: −$1,088
• HOA: −$0
• Vac / Maint / Mgmt: −$1,582
• Net cashflow: $2,845/mo
• Annual: $34,146/yr
• Cap rate: 15.17%
• Cash-on-cash: 31.69%
• DSCR: 2.41
• 1% rule: 1.96%
• Cash to close: $107,744

Investor read

• This is a 4 × 7-bed/4.0-bath units multifamily listed at $385k.
• At list price, monthly cash flow is $3k ($34k/yr) — positive. Per door: $711/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $385k).
• It's been on market 15 days — a 2% lower offer ($379k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $379k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#296 in IL) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D+, crime D+, health & safety D+.
• Thornton Fractional Twp Hsd 215 (suburban): math 9% / reading 13% proficiency, ranked #563 of 620 in IL (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: property tax is 2.9% of price.
• Market conditions: 132 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 6,272 units permitted in Cook County in 2024 (4,658 in 5+ unit buildings).
• 5 sale attempts since 18y 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.
• Current owner paid $260k; 48% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $108k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.2% vs local median 5.8% in Lansing — 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 $7,533/mo this rent would consume 119% of the median local household income ($76k/yr) (locally 830% 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 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.