20 Fontaine Rd

Newport News, VA 23601

$235,000D+

3 bd · 1.0 ba · 1,470 sqft · Built 1939 · SingleFamily · Active · 286 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,958/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$363
• HOA: −$0
• Vac / Maint / Mgmt: −$411
• Net cashflow: $-49/mo
• Annual: $-585/yr
• Cap rate: 6.04%
• Cash-on-cash: -0.89%
• DSCR: 0.96
• 1% rule: 0.83%
• Cash to close: $65,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $-49 ($-585/yr) — negative.
• To cash-flow at today's rent, offer at most $226k (3.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $196k (16.7% below list).
• It's been on market 286 days — a 12% lower offer ($207k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (16.7% 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 (#123 in VA, #4,018 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living A, housing A; Watch: crime F, commute F.
• Newport News City Public School District (urban): math 34% / reading 54% proficiency, ranked #112 of 131 in VA (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Riverside Elementary (math 29% / reading 51%, grade F, #898 of 1,108 statewide, top 81%, 481 students, 90% FRL); Homer L. Hines Middle (math 28% / reading 47%, grade F, #315 of 342 statewide, top 93%, 877 students, 85% FRL); Warwick High (math 42% / reading 77%, grade C+, #247 of 319 statewide, top 80%, 1,645 students, 86% FRL) — zoned schools average 87% FRL vs 55% district-wide (32 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.0%/yr); 89 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); 522 units permitted in Newport News city in 2024 (458 in 5+ unit buildings).
• Newport News County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $76k; list at $235k implies a 208% 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→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 4.2% in Newport News — 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 33% of the median local income ($71k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 286 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1939 — 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.
• 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 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?