3712-3724 Lien Rd

Madison, WI 53704

$1,099,900D-

14 bd · 7.5 ba · 6,600 sqft · Built 1971 · MultiFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,286/mo
• Mortgage (P&I): −$5,768
• Tax + insurance: −$1,733
• HOA: −$0
• Vac / Maint / Mgmt: −$1,950
• Net cashflow: $-165/mo
• Annual: $-1,984/yr
• Cap rate: 6.11%
• Cash-on-cash: -0.64%
• DSCR: 0.97
• 1% rule: 0.84%
• Cash to close: $307,972

Investor read

• This is a 7 × 2-bed/1-bath units multifamily listed at $1.10M.
• At list price, monthly cash flow is $-165 ($-2k/yr) — negative. Per door: $-24/mo.
• To cash-flow at today's rent, offer at most $1.07M (2.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $929k (15.6% below list).
• It's been on market 20 days — a 2% lower offer ($1.08M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $929k (15.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $33k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#39 in WI, #819 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+.
• Madison Metropolitan School District (urban): math 35% / reading 40% proficiency, ranked #193 of 342 in WI (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Sandburg Elementary (392 students, 64% FRL); Sherman Middle (math 17% / reading 27%, grade F, #336 of 383 statewide, top 89%, 401 students, 58% FRL); East High (math 32% / reading 42%, grade F, #123 of 483 statewide, top 28%, 1,649 students, 55% FRL).
• Market conditions: Rents rising (+1.1%/yr); 140 active listings in the ZIP; 5,519 units permitted in Dane County in 2024 (3,978 in 5+ unit buildings).
• Dane County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $315k; list at $1.10M implies a 249% gain — meaningful room to come down on a strong offer.
• Cap rate 6.1% vs local median 2.4% in Madison — 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 $9,286/mo this rent would consume 151% of the median local household income ($74k/yr) (locally 2064% 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 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?
• 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 1971 — 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.
• 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?
• 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.