137 W Lancaster Ave

Downingtown, PA 19335

$424,900B

6 bd · 6.0 ba · 3,000 sqft · Built 1950 · MultiFamily · Active · 1442 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,179/mo
• Mortgage (P&I): −$2,228
• Tax + insurance: −$708
• HOA: −$0
• Vac / Maint / Mgmt: −$1,508
• Net cashflow: $2,735/mo
• Annual: $32,820/yr
• Cap rate: 14.02%
• Cash-on-cash: 27.59%
• DSCR: 2.23
• 1% rule: 1.69%
• Cash to close: $118,972

Investor read

• This is a 3 × 2-bed/2.0-bath units multifamily listed at $425k. Condition is rated fair.
• At list price, monthly cash flow is $3k ($33k/yr) — positive. Per door: $912/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $425k).
• It's been on market 1442 days — a 12% lower offer ($374k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $374k (12.0% 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 $13k of value loss. Plan a longer hold.
• Location reads 91/100 on livability (#13 in PA, #56 nationally) — a professional / high-income tenant draw. Strengths: schools A+, amenities A+, employment A+.
• Downingtown Area SD (suburban): math 67% / reading 83% proficiency, ranked #9 of 539 in PA (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical; only 7% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.0%/yr); 232 active listings in the ZIP; high-income renter base; 1,513 units permitted in Chester County in 2024 (354 in 5+ unit buildings).
• Chester County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $24k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 2.0% rent growth), your $119k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.0% vs local median 3.1% in Downingtown — 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 $7,179/mo this rent would consume 60% of the median local household income ($143k/yr) (locally 689% 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 1442 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1950 — 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 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?

Repairs flagged (vision-AI assessment)

• Major: Kitchen cabinets — The cabinets appear to be outdated and in poor condition.
• Major: Kitchen countertops — The countertops appear to be outdated and in poor condition.
• Major: Bathroom fixtures — The fixtures appear to be outdated and in poor condition.
• Major: Bathroom tile — The tile appears to be outdated and in poor condition.
• Moderate: Exterior siding — The siding appears to be in fair condition, but some discoloration and wear is visible.
• Moderate: Exterior paint — The exterior paint appears to be in fair condition, but some discoloration and wear is visible.