856 Gephart Dr W

Cumberland, MD 21502

$39,900B

4 bd · 1.0 ba · 938 sqft · Built 1920 · SingleFamily · Active · 76 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,421/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$109
• HOA: −$0
• Vac / Maint / Mgmt: −$298
• Net cashflow: $804/mo
• Annual: $9,648/yr
• Cap rate: 32.14%
• Cash-on-cash: 92.32%
• DSCR: 5.11
• 1% rule: 3.56%
• Cash to close: $11,172

Investor read

• This is a 4-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $804 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 76 days — a 6% lower offer ($38k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $38k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#64 in MD, #2,385 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools D+, crime F, employment F.
• Allegany County Public Schools (other): math 15% / reading 30% proficiency, ranked #18 of 24 in MD (top 75%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $56/mo; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+10.9%/yr); 235 active listings in the ZIP; 24 units permitted in Allegany County in 2024 (0 in 5+ unit buildings).
• Allegany County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 28y ago; this cycle's ask has dropped $5k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $34k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 32.1% vs local median 6.7% in Cumberland — 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

• It's been on market 76 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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?
• 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 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?
• 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?
• 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.