1318 Highland Park Dr

Lexington-Fayette, KY 40505

$209,900B-

6 bd · 1.0 ba · 1,344 sqft · Built 1944 · MultiFamily · Active · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,775/mo
• Mortgage (P&I): −$1,101
• Tax + insurance: −$165
• HOA: −$0
• Vac / Maint / Mgmt: −$583
• Net cashflow: $927/mo
• Annual: $11,119/yr
• Cap rate: 11.59%
• Cash-on-cash: 18.92%
• DSCR: 1.84
• 1% rule: 1.32%
• Cash to close: $58,772

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $210k.
• At list price, monthly cash flow is $927 ($11k/yr) — positive. Per door: $463/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $210k).
• It's been on market 53 days — a 3% lower offer ($204k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Northern Elementary School (math 12% / reading 17%, grade F, #627 of 676 statewide, top 93%, 439 students, 71% FRL); Bryan Station Middle School (math 23% / reading 42%, grade F, #116 of 217 statewide, top 55%, 815 students, 56% FRL); Bryan Station High School (math 18% / reading 25%, grade F, #209 of 254 statewide, top 82%, 1,893 students, 59% FRL) — zoned schools average 62% FRL vs 44% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 23% at this address vs 40% district-wide (-17 pts) — the specific schools serving this property underperform the Fayette County average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 68 active listings in the ZIP; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 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 $105k; list at $210k implies a 100% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.3% rent growth), your $59k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 11.6% vs local median 3.8% in Lexington-Fayette — 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

• It's been on market 53 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1944 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.