18-20 North High St

Melrose, MA 02176

$1,585,000F

28 bd · 16.0 ba · 4,154 sqft · Built 1900 · MultiFamily · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,978/mo
• Mortgage (P&I): −$8,312
• Tax + insurance: −$2,642
• HOA: −$0
• Vac / Maint / Mgmt: −$2,305
• Net cashflow: $-2,281/mo
• Annual: $-27,372/yr
• Cap rate: 4.57%
• Cash-on-cash: -6.17%
• DSCR: 0.73
• 1% rule: 0.69%
• Cash to close: $443,800

Investor read

• This is a 3×1bd/1.0ba + 1×3bd/1.0ba units multifamily listed at $1.58M. Condition is rated good.
• At list price, monthly cash flow is $-2k ($-27k/yr) — negative. Per door: $-570/mo.
• To cash-flow at today's rent, offer at most $1.25M (20.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.10M (30.7% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $1.10M (30.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $11k of loan paydown is wiped out by about $48k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#3 in MA, #147 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: cost of living F.
• Melrose (suburban): math 53% / reading 64% proficiency, ranked #71 of 302 in MA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Zoned schools: Melrose High (math 61% / reading 77%, grade B, #90 of 343 statewide, top 27%, 926 students, 0% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.9%/yr); 30 active listings in the ZIP; high-income renter base; 3,670 units permitted in Middlesex County in 2024 (2,611 in 5+ unit buildings).
• Middlesex County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 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 $620k; list at $1.58M implies a 156% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 60% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 2.3% in Melrose — 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 $10,978/mo this rent would consume 98% of the median local household income ($134k/yr) (locally 959% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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?
• Built in 1900 — 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 A-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.