3642 Menlo Rd

Shaker Heights, OH 44120

$139,900B

4 bd · 2.0 ba · 2,206 sqft · Built 1925 · MultiFamily · Pending · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,849/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$395
• HOA: −$0
• Vac / Maint / Mgmt: −$388
• Net cashflow: $331/mo
• Annual: $3,977/yr
• Cap rate: 9.14%
• Cash-on-cash: 10.15%
• DSCR: 1.45
• 1% rule: 1.32%
• Cash to close: $39,172

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $140k.
• At list price, monthly cash flow is $331 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 79 days — a 6% lower offer ($132k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $132k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k 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: property tax is 2.9% of price; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 125 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals at typical pace (median 21d 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.
• At projected returns (-3.0% appreciation + 3.3% rent growth), your $39k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.1% 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.
• At $1,849/mo this rent would consume 47% of the median local household income ($47k/yr) (locally 2289% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 79 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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.