408 Dudley Ave

Pocomoke City, MD 21851

$169,900C

3 bd · 1.0 ba · 1,344 sqft · Built 1940 · SingleFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,939/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$407
• Net cashflow: $372/mo
• Annual: $4,463/yr
• Cap rate: 8.92%
• Cash-on-cash: 9.38%
• DSCR: 1.42
• 1% rule: 1.14%
• Cash to close: $47,572

Investor read

• This is a 3-bed/1.0-bath single-family listed at $170k.
• At list price, monthly cash flow is $372 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $170k).
• It's been on market 20 days — a 2% lower offer ($167k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $167k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#157 in MD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A-; Watch: employment D+, crime F, amenities F.
• Worcester County Public Schools (town): math 30% / reading 44% proficiency, ranked #6 of 24 in MD (top 25%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pocomoke Elementary (math 17% / reading 17%, grade F, #408 of 860 statewide, top 50%, 443 students, 76% FRL); Pocomoke Middle (math 22% / reading 29%, grade F, #97 of 225 statewide, top 46%, 448 students, 72% FRL); Pocomoke High (math 32% / reading 67%, grade D, #108 of 222 statewide, top 49%, 352 students, 70% FRL) — zoned schools average 73% FRL vs 39% district-wide (34 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 69 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); 354 units permitted in Worcester County in 2024 (6 in 5+ unit buildings).
• Worcester County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 28y 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 $90k; list at $170k implies a 89% gain — meaningful room to come down on a strong offer.
• 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 8.9% vs local median 5.6% in Pocomoke City — 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

• Built in 1940 — 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.
• 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.
• 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.