556 Gerry St

Gary, IN 46406

$189,900D-

3 bd · 1.0 ba · 784 sqft · Built 1954 · SingleFamily · Pending · 115 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,301/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$181
• HOA: −$0
• Vac / Maint / Mgmt: −$273
• Net cashflow: $-149/mo
• Annual: $-1,785/yr
• Cap rate: 5.35%
• Cash-on-cash: -3.36%
• DSCR: 0.85
• 1% rule: 0.69%
• Cash to close: $53,172

Investor read

• This is a 3-bed/1.0-bath single-family listed at $190k.
• At list price, monthly cash flow is $-149 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $164k (13.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $130k (31.5% below list).
• It's been on market 115 days — a 9% lower offer ($173k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $130k (31.5% below list) — sets the bar for 1% rule.
• In year one you build about $4k of equity ($1k loan paydown + $2k appreciation (1.3% local appreciation)).
• Location reads 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1954 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 54 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $20k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 9, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.4% vs local median 9.1% in Gary — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• It's been on market 115 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1954 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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?