2340 S 7th St

Springfield, IL 62703

$85,000B+

4 bd · 1.5 ba · 1,404 sqft · Built 1935 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,443/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$199
• HOA: −$0
• Vac / Maint / Mgmt: −$303
• Net cashflow: $495/mo
• Annual: $5,944/yr
• Cap rate: 13.29%
• Cash-on-cash: 24.98%
• DSCR: 2.11
• 1% rule: 1.70%
• Cash to close: $23,800

Investor read

• This is a 4-bed/1.5-bath single-family listed at $85k.
• At list price, monthly cash flow is $495 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $85k).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#122 in IL, #2,138 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools D+, crime F.
• Springfield SD 186 (urban): math 17% / reading 22% proficiency, ranked #438 of 620 in IL (top 71%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+12.2%/yr); 107 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 70% of comp listings sitting > 30 days — soft ceiling on asking rent; 225 units permitted in Sangamon County in 2024 (48 in 5+ unit buildings).
• Sangamon County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 18y ago; this cycle's ask has dropped $5k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $58k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $24k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.3% vs local median 4.9% in Springfield — 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.
• This rent runs 38% of the median local income ($45k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1935 — 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.
• 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.