3604 Pennington Rd

Shaker Heights, OH 44120

$78,200B

3 bd · 1.5 ba · 1,362 sqft · Built 1925 · SingleFamily · Pending · 82 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,636/mo
• Mortgage (P&I): −$410
• Tax + insurance: −$130
• HOA: −$0
• Vac / Maint / Mgmt: −$344
• Net cashflow: $752/mo
• Annual: $9,023/yr
• Cap rate: 17.83%
• Cash-on-cash: 41.21%
• DSCR: 2.83
• 1% rule: 2.09%
• Cash to close: $21,896

Investor read

• This is a 3-bed/1.5-bath single-family listed at $78k.
• At list price, monthly cash flow is $752 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $78k).
• It's been on market 82 days — a 6% lower offer ($74k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $74k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $541 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#15 in OH, #134 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, commute A+; Watch: amenities F.
• Shaker Heights City (suburban): math 50% / reading 63% proficiency, ranked #309 of 656 in OH (top 47%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 125 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); 1,441 units permitted in Cuyahoga County in 2024 (700 in 5+ unit buildings).
• Cuyahoga County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 32y ago; this cycle's ask has dropped $14k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $55k; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.3% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 17.8% vs local median 2.5% in Shaker Heights — 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 42% of the median local income ($47k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 82 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.