6723 Kernel Ct

Ballenger Creek, MD 21703

$265,000D+

3 bd · 1.5 ba · 1,280 sqft · Built 1988 · Townhouse · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,381/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$355
• HOA: −$103
• Vac / Maint / Mgmt: −$500
• Net cashflow: $32/mo
• Annual: $390/yr
• Cap rate: 6.44%
• Cash-on-cash: 0.53%
• DSCR: 1.02
• 1% rule: 0.90%
• Cash to close: $74,200

Investor read

• This is a 3-bed/1.5-bath townhouse listed at $265k.
• At list price, monthly cash flow is $32 ($390/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 $238k (10.2% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $238k (10.2% 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 $8k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#95 in MD, #3,677 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: cost of living D, crime D-, commute F.
• Frederick County Public Schools (other): math 27% / reading 43% proficiency, ranked #4 of 24 in MD (top 17%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ballenger Creek Elementary (math 18% / reading 29%, grade F, #285 of 860 statewide, top 33%, 678 students, 50% FRL); Ballenger Creek Middle (math 14% / reading 41%, grade F, #80 of 225 statewide, top 35%, 805 students, 36% FRL); Tuscarora High (math 58% / reading 76%, grade B, #50 of 222 statewide, top 23%, 1,717 students, 39% FRL) — zoned schools average 41% FRL vs 20% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.0%/yr); 175 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,562 units permitted in Frederick County in 2024 (374 in 5+ unit buildings).
• Frederick County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 26y 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: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.9% in Ballenger Creek — 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 does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• Crime grade is D 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?
• 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.