1245 Sir Kay Dr

Chesapeake, VA 23323

$325,000D+

4 bd · 2.0 ba · 1,295 sqft · Built 1972 · SingleFamily · Under Contract · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,562/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$386
• HOA: −$0
• Vac / Maint / Mgmt: −$538
• Net cashflow: $-66/mo
• Annual: $-796/yr
• Cap rate: 6.05%
• Cash-on-cash: -0.87%
• DSCR: 0.96
• 1% rule: 0.79%
• Cash to close: $91,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $325k.
• At list price, monthly cash flow is $-66 ($-796/yr) — negative.
• To cash-flow at today's rent, offer at most $313k (3.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $256k (21.2% below list).
• It's been on market 15 days — a 2% lower offer ($320k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $256k (21.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#236 in VA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: crime C-, cost of living C-, amenities F.
• Chesapeake City Public School District (suburban): math 58% / reading 74% proficiency, ranked #31 of 131 in VA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Camelot Elementary (math 47% / reading 52%, grade D, #742 of 1,108 statewide, top 70%, 498 students, 96% FRL); Hugo A. Owens Middle (math 57% / reading 76%, grade A-, #107 of 342 statewide, top 33%, 1,315 students, 30% FRL); Deep Creek High (math 70% / reading 82%, grade A-, #102 of 319 statewide, top 32%, 1,597 students, 49% FRL) — zoned schools average 58% FRL vs 28% district-wide (31 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+6.1%/yr); 184 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 597 units permitted in Chesapeake city in 2024 (0 in 5+ unit buildings).
• Chesapeake County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 8y 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.
• Climate carrying-cost: 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 6.0% vs local median 3.7% in Chesapeake — 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

• 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?
• Built in 1972 — 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 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?
• 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?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?