2144 Kentucky St

Gary, IN 46407

$10,500D+

3 bd · 1.0 ba · 1,064 sqft · Built 1949 · SingleFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,259/mo
• Mortgage (P&I): −$55
• Tax + insurance: −$28
• HOA: −$0
• Vac / Maint / Mgmt: −$264
• Net cashflow: $912/mo
• Annual: $10,939/yr
• Cap rate: 110.47%
• Cash-on-cash: 372.07%
• DSCR: 17.56
• 1% rule: 11.99%
• Cash to close: $2,940

Investor read

• This is a 3-bed/1.0-bath single-family listed at $10k.
• At list price, monthly cash flow is $912 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $10k).
• It's been on market 61 days — a 6% lower offer ($10k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $10k (6.0% below list) — sets the bar for market timing.
• In year one you build about $176 of equity ($73 loan paydown + $103 appreciation (1.0% local appreciation)).
• Location reads 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 2.7% of price; built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 122 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 23y 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.
• At projected returns (1.0% appreciation + 3.0% rent growth), your $3k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 110.5% vs local median 9.1% in Gary — 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 $1,259/mo this rent would consume 53% of the median local household income ($29k/yr) (locally 392% 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 61 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1949 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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?