425-503 Lighthouse St

Erie, PA 16507

$240,000B+

8 bd · 10.0 ba · 3,712 sqft · Built 1971 · MultiFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,677/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$772
• Net cashflow: $1,246/mo
• Annual: $14,955/yr
• Cap rate: 12.52%
• Cash-on-cash: 22.25%
• DSCR: 1.99
• 1% rule: 1.53%
• Cash to close: $67,200

Investor read

• This is a 4 × 2-bed/2.5-bath units multifamily listed at $240k. Condition is rated fair.
• At list price, monthly cash flow is $1k ($15k/yr) — positive. Per door: $312/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $240k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $12k of equity ($2k loan paydown + $10k appreciation (4.2% local appreciation)).
• Location reads 83/100 on livability (#109 in PA, #840 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D+, employment F.
• Erie City SD (urban): math 12% / reading 19% proficiency, ranked #510 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Edison El Sch (math 2% / reading 8%, grade F, #1,495 of 1,518 statewide, top 100%, 419 students, 100% FRL); Woodrow Wilson Ms (math 5% / reading 19%, grade F, #489 of 512 statewide, top 96%, 756 students, 100% FRL); Northwest Pa Collegiate Academy (math 82%, 753 students, 100% FRL) — zoned schools average 100% FRL vs 81% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents flat; 40 active listings in the ZIP; lower-income renter base — watch delinquency; 364 units permitted in Erie County in 2024 (188 in 5+ unit buildings).
• Erie County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 6y 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 $160k; list at $240k implies a 50% gain — meaningful room to come down on a strong offer.
• At projected returns (4.2% appreciation + 0.1% rent growth), your $67k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 12.5% vs local median 5.4% in Erie — 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 $3,677/mo this rent would consume 132% of the median local household income ($33k/yr) (locally 776% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1971 — 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.
• Crime grade is D 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.
• 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.

Repairs flagged (vision-AI assessment)

• Major: roof — Signs of wear
• Major: exterior siding — Weathered and peeling
• Major: interior walls — Worn paint
• Major: flooring — Worn carpet
• Major: bathroom fixtures — Worn and dated