662 S Barbee Way

Louisville, KY 40217

$389,000C

16 bd · 16.0 ba · 2,164 sqft · Built 1926 · MultiFamily · Pending · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,139/mo
• Mortgage (P&I): −$2,040
• Tax + insurance: −$495
• HOA: −$0
• Vac / Maint / Mgmt: −$869
• Net cashflow: $735/mo
• Annual: $8,822/yr
• Cap rate: 8.56%
• Cash-on-cash: 8.10%
• DSCR: 1.36
• 1% rule: 1.06%
• Cash to close: $108,920

Investor read

• This is a 4 × 2-bed/1-bath units multifamily listed at $389k.
• At list price, monthly cash flow is $735 ($9k/yr) — positive. Per door: $184/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $389k).
• It's been on market 24 days — a 2% lower offer ($383k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $383k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#333 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, health & safety D+, schools D-.
• Jefferson County (urban): math 19% / reading 35% proficiency, ranked #121 of 165 in KY (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1926 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 74 active listings in the ZIP; 2,836 units permitted in Jefferson County in 2024 (1,558 in 5+ unit buildings).
• Jefferson County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 13y 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 $302k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 5.0% in Louisville — 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 $4,139/mo this rent would consume 72% of the median local household income ($69k/yr) (locally 569% 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 1926 — 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 D-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?
• 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.