Bar Harbor Plan

Lewes, DE 19958

$679,990F

4 bd · 3.5 ba · 2,856 sqft · Built — · MultiFamily · Active · 267 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,081/mo
• Mortgage (P&I): −$5,596
• Tax + insurance: −$1,779
• HOA: −$0
• Vac / Maint / Mgmt: −$647
• Net cashflow: $-4,941/mo
• Annual: $-59,289/yr
• Cap rate: 0.74%
• Cash-on-cash: -19.84%
• DSCR: 0.12
• 1% rule: 0.29%
• Cash to close: $298,807

Investor read

• This is a 4-bed/3.5-bath multifamily listed at $680k. Condition is rated excellent.
• At list price, monthly cash flow is $-5k ($-59k/yr) — negative.
• To cash-flow at today's rent, offer at most $352k (48.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $308k (54.7% below list).
• It's been on market 267 days — a 12% lower offer ($598k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $308k (54.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $32k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#40 in DE) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, health & safety A+; Watch: commute F, cost of living F.
• Cape Henlopen School District (town): math 42% / reading 55% proficiency, ranked #5 of 26 in DE (top 19%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lewes Elementary School (math 58% / reading 60%, grade B-, #4 of 105 statewide, top 4%, 582 students, 0% FRL); Beacon Middle School (math 49% / reading 62%, grade B-, #1 of 36 statewide, top 0%, 648 students, 0% FRL); Cape Henlopen High School (math 26% / reading 51%, grade F, #14 of 40 statewide, top 33%, 1,813 students, 0% FRL) — zoned schools average 0% FRL vs 41% district-wide (41 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents flat; 1255 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 0.7% vs local median 1.9% in Lewes — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 38% of the median local income ($97k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 267 days. Have you received any prior offers? Is the seller open to a 55% concession, seller financing, or rate buy-down credit?
• 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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.