104 Lilac Dr

Berea, KY 40403

$235,000D-

4 bd · 3.0 ba · 1,482 sqft · Built — · MultiFamily · Active · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,929/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$279
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $13/mo
• Annual: $154/yr
• Cap rate: 6.36%
• Cash-on-cash: 0.23%
• DSCR: 1.01
• 1% rule: 0.82%
• Cash to close: $65,800

Investor read

• This is a 4-bed/3.0-bath multifamily listed at $235k.
• At list price, monthly cash flow is $13 ($154/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $193k (17.9% below list).
• It's been on market 62 days — a 6% lower offer ($221k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (17.9% 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 $7k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#104 in KY, #4,354 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Berea Independent (town): math 21% / reading 38% proficiency, ranked #117 of 165 in KY (top 71%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Berea Community Elementary School (math 17% / reading 27%, grade F, #525 of 676 statewide, top 82%, 503 students, 69% FRL); Berea Community Middle School (math 20% / reading 44%, grade F, #121 of 217 statewide, top 57%, 230 students, 62% FRL); Berea Community High School (math 32% / reading 42%, grade F, #58 of 254 statewide, top 27%, 353 students, 56% FRL).
• Market conditions: 206 active listings in the ZIP; 453 units permitted in Madison County in 2024 (64 in 5+ unit buildings).
• Madison County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 20y ago; this cycle's ask has dropped $34k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $182k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.4% vs local median 3.1% in Berea — 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.
• This rent runs 37% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 62 days. Have you received any prior offers? Is the seller open to a 18% 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.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.