5055 Memorial Rd

Heidelberg, PA 18078

$542,900C

7 bd · 2.5 ba · 3,513 sqft · Built 1885 · MultiFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,848/mo
• Mortgage (P&I): −$2,847
• Tax + insurance: −$671
• HOA: −$0
• Vac / Maint / Mgmt: −$1,228
• Net cashflow: $1,101/mo
• Annual: $13,218/yr
• Cap rate: 8.73%
• Cash-on-cash: 8.70%
• DSCR: 1.39
• 1% rule: 1.08%
• Cash to close: $152,012

Investor read

• This is a 7-bed/2.5-bath multifamily listed at $543k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $543k).
• It's been on market 27 days — a 2% lower offer ($535k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $535k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-1.9%/yr); year-one equity from $4k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#158 in PA, #1,307 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: schools D-, commute F.
• Northwestern Lehigh SD (rural): math 42% / reading 60% proficiency, ranked #128 of 539 in PA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 11% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1885 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 83 active listings in the ZIP; 765 units permitted in Lehigh County in 2024 (286 in 5+ unit buildings).
• Lehigh County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 15 sale attempts since 19y 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 $460k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-1.9% appreciation + 3.0% rent growth), your $152k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.7% vs local median 3.2% in Heidelberg — 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.

Questions for listing agent

• Built in 1885 — 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?
• 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.