140 Summit St

Rockford, IL 61107

$225,000B-

24 bd · 16.0 ba · — sqft · Built 1900 · MultiFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,402/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$276
• HOA: −$0
• Vac / Maint / Mgmt: −$924
• Net cashflow: $2,021/mo
• Annual: $24,256/yr
• Cap rate: 17.07%
• Cash-on-cash: 38.50%
• DSCR: 2.71
• 1% rule: 1.96%
• Cash to close: $63,000

Investor read

• This is a 2×2bd/1ba + 2×1bd/1ba units multifamily listed at $225k.
• At list price, monthly cash flow is $2k ($24k/yr) — positive. Per door: $505/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $225k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• 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 62/100 on livability (#876 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Rockford SD 205 (urban): math 12% / reading 16% proficiency, ranked #533 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: C Henry Bloom Elem School (math 12% / reading 8%, grade F, #1,517 of 2,056 statewide, top 78%, 410 students, 0% FRL); Abraham Lincoln Middle School (math 3% / reading 7%, grade F, #636 of 665 statewide, top 98%, 699 students, 0% FRL); Rockford East High School (math 7% / reading 13%, grade F, #528 of 693 statewide, top 82%, 1,718 students, 0% FRL) — zoned schools average 0% FRL vs 73% district-wide (73 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.9%/yr); 157 active listings in the ZIP; solid renter incomes; 285 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 5.9% rent growth), your $63k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 17.1% vs local median 6.1% in Rockford — 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 $4,402/mo this rent would consume 67% of the median local household income ($79k/yr) (locally 981% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1900 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.