305-307 Gridley Ave

Erie, PA 16509

$195,000D+

4 bd · 2.0 ba · 2,312 sqft · Built 1928 · MultiFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,182/mo
• Mortgage (P&I): −$1,023
• Tax + insurance: −$294
• HOA: −$0
• Vac / Maint / Mgmt: −$458
• Net cashflow: $407/mo
• Annual: $4,882/yr
• Cap rate: 8.80%
• Cash-on-cash: 8.94%
• DSCR: 1.40
• 1% rule: 1.12%
• Cash to close: $54,600

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $195k.
• At list price, monthly cash flow is $407 ($5k/yr) — positive. Per door: $203/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 21 days — a 2% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $192k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#109 in PA, #840 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D+, employment F.
• Erie City SD (urban): math 12% / reading 19% proficiency, ranked #510 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 120 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 364 units permitted in Erie County in 2024 (188 in 5+ unit buildings).
• Erie County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $118k; list at $195k implies a 65% gain — meaningful room to come down on a strong offer.
• Cap rate 8.8% vs local median 5.1% in Erie — 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.
• This rent runs 38% of the median local income ($69k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1928 — 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.
• Crime grade is D 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?
• 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.