316 Lawrence Ave

Elgin, IL 60123

$500,000B

20 bd · 25.0 ba · 2,634 sqft · Built 1863 · MultiFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,402/mo
• Mortgage (P&I): −$2,622
• Tax + insurance: −$833
• HOA: −$0
• Vac / Maint / Mgmt: −$1,974
• Net cashflow: $3,972/mo
• Annual: $47,666/yr
• Cap rate: 15.83%
• Cash-on-cash: 34.05%
• DSCR: 2.51
• 1% rule: 1.88%
• Cash to close: $140,000

Investor read

• This is a 5 × 4-bed/5.0-bath units multifamily listed at $500k. Condition is rated good.
• At list price, monthly cash flow is $4k ($48k/yr) — positive. Per door: $794/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $500k).
• It's been on market 21 days — a 2% lower offer ($492k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $492k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#47 in IL, #975 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: health & safety C-, schools D-.
• SD U-46 (suburban): math 19% / reading 20% proficiency, ranked #386 of 620 in IL (top 62%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1863 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.7%/yr); 93 active listings in the ZIP; solid renter incomes; 1,944 units permitted in Kane County in 2024 (357 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.7% rent growth), your $140k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.8% vs local median 3.4% in Elgin — 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 $9,402/mo this rent would consume 129% of the median local household income ($88k/yr) (locally 1119% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1863 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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.