267 S Potomac St

Hagerstown, MD 21740

$550,000B-

8 bd · 0.0 ba · 5,316 sqft · Built 1900 · MultiFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,901/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$368
• HOA: −$0
• Vac / Maint / Mgmt: −$1,239
• Net cashflow: $1,410/mo
• Annual: $16,914/yr
• Cap rate: 9.37%
• Cash-on-cash: 10.98%
• DSCR: 1.49
• 1% rule: 1.07%
• Cash to close: $154,000

Investor read

• This is a 4 × 2-bed/?-bath units multifamily listed at $550k.
• At list price, monthly cash flow is $1k ($17k/yr) — positive. Per door: $352/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $550k).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#83 in MD, #3,170 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: crime F, employment F.
• Washingtion County Public Schools (suburban): math 18% / reading 33% proficiency, ranked #13 of 24 in MD (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Bester Elementary (math 5% / reading 11%, grade F, #674 of 860 statewide, top 79%, 494 students, 88% FRL); E. Russell Hicks Middle (math 8% / reading 31%, grade F, #154 of 225 statewide, top 68%, 824 students, 74% FRL); South Hagerstown High (math 30% / reading 63%, grade D-, #118 of 222 statewide, top 54%, 1,487 students, 78% FRL) — zoned schools average 80% FRL vs 39% district-wide (41 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 368 active listings in the ZIP; 232 units permitted in Washington County in 2024 (12 in 5+ unit buildings).
• 4 sale attempts since 30y ago; this cycle's ask is 1445% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $210k; list at $550k implies a 162% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $154k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.4% vs local median 4.4% in Hagerstown — 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 $5,901/mo this rent would consume 113% of the median local household income ($63k/yr) (locally 2832% 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?
• 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.
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.