1418 Richmond Ave

Portsmouth, VA 23704

$260,000B-

4 bd · 2.0 ba · 2,048 sqft · Built 1962 · MultiFamily · Under Contract · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,042/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$332
• HOA: −$0
• Vac / Maint / Mgmt: −$639
• Net cashflow: $708/mo
• Annual: $8,494/yr
• Cap rate: 9.56%
• Cash-on-cash: 11.67%
• DSCR: 1.52
• 1% rule: 1.17%
• Cash to close: $72,800

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $260k.
• At list price, monthly cash flow is $708 ($8k/yr) — positive. Per door: $354/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $260k).
• It's been on market 19 days — a 2% lower offer ($256k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $256k (1.5% below list) — sets the bar for market timing.
• 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 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Brighton Elementary (math 12% / reading 32%, grade F, #1,069 of 1,108 statewide, top 97%, 411 students, 97% FRL); I.C. Norcom High (math 39% / reading 58%, grade D, #301 of 319 statewide, top 95%, 1,043 students, 100% FRL) — zoned schools average 98% FRL vs 60% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.3%/yr); 134 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 6 sale attempts since 6y 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 $190k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.3% rent growth), your $73k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.6% vs local median 4.6% in Portsmouth — 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 $3,042/mo this rent would consume 74% of the median local household income ($50k/yr) (locally 1727% 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 1962 — 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 B-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?
• 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.