139 Prospect St

Chestertown, MD 21620

$225,000D-

3 bd · 1.0 ba · 1,200 sqft · Built 1991 · SingleFamily · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,611/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$273
• HOA: −$0
• Vac / Maint / Mgmt: −$338
• Net cashflow: $-180/mo
• Annual: $-2,157/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.42%
• DSCR: 0.85
• 1% rule: 0.72%
• Cash to close: $63,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-180 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $193k (14.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $161k (28.4% below list).
• It's been on market 87 days — a 6% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $161k (28.4% below list) — sets the bar for 1% rule.
• 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 66/100 on livability (#238 in MD) — a middle-class / working-renter tenant base. Strengths: health & safety A-; Watch: employment D+, amenities F, commute F.
• Kent County Public Schools (rural): math 10% / reading 28% proficiency, ranked #20 of 24 in MD (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: H. H. Garnett Elementary (math 8% / reading 17%, grade F, #538 of 860 statewide, top 64%, 347 students, 100% FRL); Kent County Middle School (math 7% / reading 29%, grade F, #165 of 225 statewide, top 75%, 399 students, 64% FRL); Kent County High (math 27% / reading 57%, grade F, #126 of 222 statewide, top 57%, 531 students, 54% FRL) — zoned schools average 73% FRL vs 47% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 126 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 50 units permitted in Kent County in 2024 (0 in 5+ unit buildings).
• Kent County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $60k; list at $225k implies a 275% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 60% 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 5.3% vs local median 2.7% in Chestertown — 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

• 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?
• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• 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 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?
• 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.
• 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.