2827 Penn St

Wilmington, NC 28412

$259,900B

4 bd · 2.0 ba · 1,392 sqft · Built 1942 · MultiFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,936/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$153
• HOA: −$0
• Vac / Maint / Mgmt: −$617
• Net cashflow: $804/mo
• Annual: $9,648/yr
• Cap rate: 10.01%
• Cash-on-cash: 13.26%
• DSCR: 1.59
• 1% rule: 1.13%
• Cash to close: $72,772

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $260k.
• At list price, monthly cash flow is $804 ($10k/yr) — positive. Per door: $402/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $260k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#142 in NC) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living B+, housing B+; Watch: amenities C-, employment C-, crime F.
• New Hanover County Schools (urban): math 48% / reading 53% proficiency, ranked #61 of 178 in NC (top 34%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Sunset Park Elementary (math 22% / reading 27%, grade F, #1,112 of 1,410 statewide, top 82%, 409 students, 99% FRL); Williston Middle (math 17% / reading 30%, grade F, #402 of 475 statewide, top 85%, 683 students, 100% FRL); New Hanover High (math 60% / reading 53%, grade C, #261 of 535 statewide, top 49%, 1,466 students, 100% FRL) — zoned schools average 100% FRL vs 42% district-wide (58 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 35% at this address vs 50% district-wide (-16 pts) — the specific schools serving this property underperform the New Hanover County Schools average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1942 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.6%/yr); 417 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 2,581 units permitted in New Hanover County in 2024 (1,185 in 5+ unit buildings).
• New Hanover County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 1.6% rent growth), your $73k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.0% vs local median 2.6% in Wilmington — 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 $2,936/mo this rent would consume 49% of the median local household income ($72k/yr) (locally 2337% 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 1942 — 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.
• 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 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.