557 Southwest Cutoff #140

Worcester, MA 01607

$165,000B-

2 bd · 2.0 ba · 980 sqft · Built 1984 · Manufactured · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,982/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$275
• HOA: −$0
• Vac / Maint / Mgmt: −$416
• Net cashflow: $426/mo
• Annual: $5,110/yr
• Cap rate: 9.39%
• Cash-on-cash: 11.06%
• DSCR: 1.49
• 1% rule: 1.20%
• Cash to close: $46,200

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $165k.
• At list price, monthly cash flow is $426 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $165k).
• It's been on market 22 days — a 2% lower offer ($163k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 13 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• 2 sale attempts since 17y 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 $38k; list at $165k implies a 334% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $46k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.4% vs local median 4.1% in Worcester — 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 30% of the median local income ($79k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.