524 Valley Rd

Charlottesville, VA 22903

$900,000D

9 bd · 4.0 ba · 2,370 sqft · Built 1940 · MultiFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,031/mo
• Mortgage (P&I): −$4,720
• Tax + insurance: −$1,033
• HOA: −$0
• Vac / Maint / Mgmt: −$1,477
• Net cashflow: $-198/mo
• Annual: $-2,381/yr
• Cap rate: 6.10%
• Cash-on-cash: -0.68%
• DSCR: 0.97
• 1% rule: 0.78%
• Cash to close: $252,000

Investor read

• This is a 9-bed/4.0-bath multifamily listed at $900k.
• At list price, monthly cash flow is $-198 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $865k (3.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $703k (21.9% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $703k (21.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $27k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#27 in VA, #707 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: cost of living D, crime D-.
• Charlottesville Cty Public School District (urban): math 42% / reading 61% proficiency, ranked #97 of 131 in VA (top 74%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Charlottesville High (math 53% / reading 84%, grade B, #178 of 319 statewide, top 56%, 1,359 students, 72% FRL) — zoned schools average 72% FRL vs 50% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 68% at this address vs 52% district-wide (+17 pts) — the actual schools serving this property are materially stronger than the Charlottesville Cty Public School District average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: flood insurance adds $56/mo; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 225 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 34 units permitted in Charlottesville city in 2024 (18 in 5+ unit buildings).
• Charlottesville County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 6y 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.
• Current owner paid $575k; list at $900k implies a 57% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 2.9% in Charlottesville — 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 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?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.