388 Redding Rd

Lexington-Fayette, KY 40517

$999,900C

16 bd · 8.0 ba · 7,300 sqft · Built 1978 · MultiFamily · Active · 64 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,223/mo
• Mortgage (P&I): −$5,244
• Tax + insurance: −$725
• HOA: −$0
• Vac / Maint / Mgmt: −$2,147
• Net cashflow: $2,108/mo
• Annual: $25,297/yr
• Cap rate: 8.82%
• Cash-on-cash: 9.04%
• DSCR: 1.40
• 1% rule: 1.02%
• Cash to close: $279,972

Investor read

• This is a 8 × 2-bed/1.0-bath units multifamily listed at $1000k.
• At list price, monthly cash flow is $2k ($25k/yr) — positive. Per door: $264/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($10k rent vs $1000k).
• It's been on market 64 days — a 6% lower offer ($940k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $940k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Tates Creek High School (math 29% / reading 32%, grade F, #121 of 254 statewide, top 47%, 1,734 students, 52% FRL).
• Market conditions: Rents rising fast (+4.5%/yr); 103 active listings in the ZIP; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $660k; list at $1000k implies a 52% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $280k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.8% vs local median 3.8% in Lexington-Fayette — 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 $10,223/mo this rent would consume 229% of the median local household income ($54k/yr) (locally 2743% 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 64 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.