8 Hill St

Frostburg, MD 21532

$245,000B-

12 bd · 6.0 ba · 3,780 sqft · Built 1935 · MultiFamily · Active · 84 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,718/mo
• Mortgage (P&I): −$1,285
• Tax + insurance: −$320
• HOA: −$0
• Vac / Maint / Mgmt: −$1,201
• Net cashflow: $2,912/mo
• Annual: $34,945/yr
• Cap rate: 20.83%
• Cash-on-cash: 51.91%
• DSCR: 3.31
• 1% rule: 2.33%
• Cash to close: $68,600

Investor read

• This is a 12-bed/6.0-bath multifamily listed at $245k.
• At list price, monthly cash flow is $3k ($35k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $245k).
• It's been on market 84 days — a 6% lower offer ($230k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $230k (6.0% below list) — sets the bar for market timing.
• 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 87/100 on livability (#7 in MD, #287 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, cost of living A+; Watch: employment F.
• Allegany County Public Schools (other): math 15% / reading 30% proficiency, ranked #18 of 24 in MD (top 75%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $56/mo; built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 102 active listings in the ZIP; 24 units permitted in Allegany County in 2024 (0 in 5+ unit buildings).
• Allegany County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 18y ago; this cycle's ask has dropped $30k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $185k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $69k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 20.8% vs local median 4.2% in Frostburg — 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

• It's been on market 84 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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.