22 Duluth St

Worcester, MA 01604

$614,500C-

3 bd · 2.5 ba · 1,584 sqft · Built 2008 · MultiFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,017/mo
• Mortgage (P&I): −$3,223
• Tax + insurance: −$772
• HOA: −$0
• Vac / Maint / Mgmt: −$1,474
• Net cashflow: $1,549/mo
• Annual: $18,584/yr
• Cap rate: 9.43%
• Cash-on-cash: 11.19%
• DSCR: 1.50
• 1% rule: 1.14%
• Cash to close: $172,060

Investor read

• This is a 3-bed/2.5-bath multifamily listed at $614k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $614k).
• It's been on market 22 days — a 2% lower offer ($605k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $605k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $56/mo.
• Market conditions: Rents rising (+2.2%/yr); 61 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• 3 sale attempts since 17y ago 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.
• Current owner paid $237k; list at $614k implies a 159% 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 — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.4% vs local median 4.1% in Worcester — 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 $7,017/mo this rent would consume 115% of the median local household income ($74k/yr) (locally 2232% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.