1024 Shelby Dr

Richmond, VA 23224

$240,000D

3 bd · 1.0 ba · 1,389 sqft · Built 1956 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,821/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$382
• Net cashflow: $-89/mo
• Annual: $-1,072/yr
• Cap rate: 5.85%
• Cash-on-cash: -1.59%
• DSCR: 0.93
• 1% rule: 0.76%
• Cash to close: $67,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $-89 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $224k (6.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $182k (24.1% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $182k (24.1% 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 $7k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#33 in VA, #793 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime D-.
• Richmond City Public School District (urban): math 32% / reading 47% proficiency, ranked #123 of 131 in VA (top 94%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Miles Jones Elementary (math 17% / reading 32%, grade F, #1,051 of 1,108 statewide, top 96%, 559 students, 99% FRL); Lucille M. Brown Middle (math 34% / reading 56%, grade D, #274 of 342 statewide, top 81%, 543 students, 98% FRL); Huguenot High (math 37% / reading 57%, grade D-, #305 of 319 statewide, top 97%, 1,551 students, 88% FRL) — zoned schools average 95% FRL vs 74% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 177 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 53% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,540 units permitted in Richmond city in 2024 (2,077 in 5+ unit buildings).
• Richmond County population projected at +40% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $64k; list at $240k implies a 272% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% 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 5.8% vs local median 3.2% in Richmond — 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.
• This rent runs 43% of the median local income ($50k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1956 — 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 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?
• Crime grade is D 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.