500 Umstead Dr Unit 208

Chapel Hill, NC 27516

$214,900D

3 bd · 2.0 ba · 1,157 sqft · Built 1972 · Condo · Active · 97 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,109/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$358
• HOA: −$281
• Vac / Maint / Mgmt: −$443
• Net cashflow: $-100/mo
• Annual: $-1,200/yr
• Cap rate: 5.73%
• Cash-on-cash: -1.99%
• DSCR: 0.91
• 1% rule: 0.98%
• Cash to close: $60,172

Investor read

• This is a 3-bed/2.0-bath condo listed at $215k. Condition is rated good.
• At list price, monthly cash flow is $-100 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $200k (6.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (1.9% below list).
• It's been on market 97 days — a 9% lower offer ($196k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#5 in NC, #742 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Chapel Hill-Carrboro City Schools (urban): math 60% / reading 66% proficiency, ranked #24 of 178 in NC (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Chapel Hill High (math 79% / reading 47%, grade B-, #177 of 535 statewide, top 33%, 1,597 students, 25% FRL) — zoned schools at 25% FRL track the district average.
• Market conditions: Rents rising (+2.5%/yr); 361 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 375 units permitted in Orange County in 2024 (34 in 5+ unit buildings).
• Orange County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 1.8% in Chapel Hill — 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

• 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?
• It's been on market 97 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?