308 S Howard St

Gary, IN 46403

$223,900F

3 bd · 1.5 ba · 1,146 sqft · Built 1928 · SingleFamily · Pending · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,215/mo
• Mortgage (P&I): −$1,174
• Tax + insurance: −$195
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $-409/mo
• Annual: $-4,910/yr
• Cap rate: 4.10%
• Cash-on-cash: -7.83%
• DSCR: 0.65
• 1% rule: 0.54%
• Cash to close: $62,692

Investor read

• This is a 3-bed/1.5-bath single-family listed at $224k.
• At list price, monthly cash flow is $-409 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (32.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (45.7% below list).
• It's been on market 41 days — a 3% lower offer ($217k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (45.7% 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 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 88 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 10 sale attempts since 9y 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 $28k; list at $224k implies a 686% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.1% vs local median 9.1% in Gary — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 32% of the median local income ($46k/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?
• It's been on market 41 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• Built in 1928 — 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 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?
• 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?
• 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.