2542 W Pratt St

Baltimore, MD 21223

$124,900B

4 bd · 1.5 ba · 1,700 sqft · Built 1900 · Townhouse · Pending · 142 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,872/mo
• Mortgage (P&I): −$655
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$393
• Net cashflow: $682/mo
• Annual: $8,184/yr
• Cap rate: 12.85%
• Cash-on-cash: 23.40%
• DSCR: 2.04
• 1% rule: 1.50%
• Cash to close: $34,972

Investor read

• This is a 4-bed/1.5-bath townhouse listed at $125k.
• At list price, monthly cash flow is $682 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 142 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#90 in MD, #3,396 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Baltimore City Public Schools (urban): math 7% / reading 16% proficiency, ranked #24 of 24 in MD (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Booker T. Washington Middle (math 2% / reading 8%, grade F, #223 of 225 statewide, top 99%, 157 students, 90% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.5%/yr); 422 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 1,273 units permitted in Baltimore city in 2024 (1,104 in 5+ unit buildings).
• Baltimore County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 7 sale attempts since 20y ago; this cycle's ask has dropped $25k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $49k; list at $125k implies a 154% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 7.5% rent growth), your $35k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: 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 12.8% vs local median 6.0% in Baltimore — 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 142 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.