88 Cross St

Southbridge Town, MA 01550

$1,320,000C-

9 bd · 8.0 ba · 5,224 sqft · Built 1900 · MultiFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,559/mo
• Mortgage (P&I): −$6,922
• Tax + insurance: −$1,039
• HOA: −$0
• Vac / Maint / Mgmt: −$2,847
• Net cashflow: $2,750/mo
• Annual: $33,001/yr
• Cap rate: 8.79%
• Cash-on-cash: 8.93%
• DSCR: 1.40
• 1% rule: 1.03%
• Cash to close: $369,600

Investor read

• This is a 6×2bd/1.0ba + 2×3bd/1.0ba units multifamily listed at $1.32M.
• At list price, monthly cash flow is $3k ($33k/yr) — positive. Per door: $344/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($14k rent vs $1.32M).
• It's been on market 23 days — a 2% lower offer ($1.30M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.30M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $40k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#235 in MA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: cost of living C-, employment D, schools F.
• Southbridge (suburban): math 5% / reading 17% proficiency, ranked #301 of 302 in MA (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 35 active listings in the ZIP; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• 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 $190k; list at $1.32M implies a 595% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.8% vs local median 3.7% in Southbridge Town — 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 $13,559/mo this rent would consume 245% of the median local household income ($66k/yr) (locally 1217% 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.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.