5402 85th Ave #202

New Carrollton, MD 20784

$155,000C-

2 bd · 1.0 ba · 775 sqft · Built 1963 · Condo · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,964/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$122
• HOA: −$391
• Vac / Maint / Mgmt: −$412
• Net cashflow: $226/mo
• Annual: $2,709/yr
• Cap rate: 8.04%
• Cash-on-cash: 6.24%
• DSCR: 1.28
• 1% rule: 1.27%
• Cash to close: $43,400

Investor read

• This is a 2-bed/1.0-bath condo listed at $155k.
• At list price, monthly cash flow is $226 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $155k).
• It's been on market 24 days — a 2% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $153k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#234 in MD) — a middle-class / working-renter tenant base. Strengths: housing A+, employment A-, health & safety B+; Watch: cost of living D+, amenities F, commute F.
• Prince George'S County Public Schools (suburban): math 8% / reading 24% proficiency, ranked #21 of 24 in MD (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Glenridge Elementary (math 6% / reading 14%, grade F, #602 of 860 statewide, top 71%, 769 students, 86% FRL); Thomas Johnson Middle (math 5% / reading 27%, grade F, #183 of 225 statewide, top 84%, 1,274 students, 80% FRL); Duval High (math 25% / reading 48%, grade F, #142 of 222 statewide, top 64%, 2,503 students, 74% FRL) — zoned schools average 80% FRL vs 53% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents falling (-3.3%/yr); 58 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,481 units permitted in Prince George's County in 2024 (0 in 5+ unit buildings).
• Prince George's County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 27y 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 $41k; list at $155k implies a 278% gain — meaningful room to come down on a strong offer.
• 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 8.0% vs local median 4.6% in New Carrollton — 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

• Built in 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.