406 Lee St

Hampton, VA 23669

$227,500D+

3 bd · 2.0 ba · 1,480 sqft · Built 1893 · SingleFamily · Under Contract · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,930/mo
• Mortgage (P&I): −$1,193
• Tax + insurance: −$382
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $-50/mo
• Annual: $-596/yr
• Cap rate: 6.03%
• Cash-on-cash: -0.94%
• DSCR: 0.96
• 1% rule: 0.85%
• Cash to close: $63,700

Investor read

• This is a 3-bed/2.0-bath single-family listed at $228k.
• At list price, monthly cash flow is $-50 ($-596/yr) — negative.
• To cash-flow at today's rent, offer at most $219k (3.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $193k (15.1% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $193k (15.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#133 in VA, #4,302 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A; Watch: crime C-, amenities D+, commute F.
• Hampton City Public School District (urban): math 60% / reading 70% proficiency, ranked #40 of 131 in VA (top 30%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: A.W.E. Bassette Elementary (math 32% / reading 47%, grade F, #900 of 1,108 statewide, top 83%, 494 students, 87% FRL); Phoebus High (math 57% / reading 76%, grade B, #195 of 319 statewide, top 62%, 1,365 students, 86% FRL) — zoned schools average 86% FRL vs 49% district-wide (37 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 53% at this address vs 65% district-wide (-12 pts) — the specific schools serving this property underperform the Hampton City Public School District average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1893 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.4%/yr); 232 active listings in the ZIP; 27 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 68 units permitted in Hampton city in 2024 (0 in 5+ unit buildings).
• Hampton County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 10 sale attempts since 5y 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.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 4.5% in Hampton — 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.
• This rent runs 33% of the median local income ($71k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1893 — 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 B-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?
• 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.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.