1040 Leckie St

Portsmouth, VA 23704

$279,500D

3 bd · 1.5 ba · 1,828 sqft · Built 1922 · SingleFamily · Under Contract · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,270/mo
• Mortgage (P&I): −$1,466
• Tax + insurance: −$359
• HOA: −$0
• Vac / Maint / Mgmt: −$477
• Net cashflow: $-32/mo
• Annual: $-378/yr
• Cap rate: 6.16%
• Cash-on-cash: -0.48%
• DSCR: 0.98
• 1% rule: 0.81%
• Cash to close: $78,260

Investor read

• This is a 3-bed/1.5-bath single-family listed at $280k.
• At list price, monthly cash flow is $-32 ($-378/yr) — negative.
• To cash-flow at today's rent, offer at most $274k (2.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $227k (18.8% below list).
• It's been on market 29 days — a 2% lower offer ($275k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $227k (18.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Churchland Elementary (math 47% / reading 72%, grade B-, #536 of 1,108 statewide, top 51%, 767 students, 98% FRL); Churchland Middle (math 53% / reading 77%, grade A-, #120 of 342 statewide, top 35%, 890 students, 100% FRL); I.C. Norcom High (math 39% / reading 58%, grade D, #301 of 319 statewide, top 95%, 1,043 students, 100% FRL) — zoned schools average 99% FRL vs 60% district-wide (39 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1922 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 135 active listings in the ZIP; 33 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• 8 sale attempts since 8y 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 $220k; 27% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 4.6% in Portsmouth — 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 $2,270/mo this rent would consume 55% of the median local household income ($50k/yr) (locally 1727% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Built in 1922 — 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 B-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?
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.