1020 Sedgefield St

Durham, NC 27705

$338,000C+

4 bd · 2.0 ba · 1,200 sqft · Built 1930 · MultiFamily · Active · 186 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,921/mo
• Mortgage (P&I): −$1,773
• Tax + insurance: −$503
• HOA: −$0
• Vac / Maint / Mgmt: −$823
• Net cashflow: $822/mo
• Annual: $9,861/yr
• Cap rate: 9.45%
• Cash-on-cash: 11.26%
• DSCR: 1.50
• 1% rule: 1.16%
• Cash to close: $94,640

Investor read

• This is a 2 × 2-bed/2.0-bath units multifamily listed at $338k.
• At list price, monthly cash flow is $822 ($10k/yr) — positive. Per door: $411/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $338k).
• It's been on market 186 days — a 12% lower offer ($297k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $297k (12.0% 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 $10k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#15 in NC, #1,411 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: schools D+, crime F.
• Durham Public Schools (urban): math 29% / reading 39% proficiency, ranked #132 of 178 in NC (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo; built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.0%/yr); 257 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); 2,905 units permitted in Durham County in 2024 (955 in 5+ unit buildings).
• Durham County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $30k; list at $338k implies a 1027% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk; 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 9.4% vs local median 3.0% in Durham — 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 $3,921/mo this rent would consume 64% of the median local household income ($73k/yr) (locally 3406% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 186 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 1930 — 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?