213 Hargrove St

Durham, NC 27701

$365,000D+

2 bd · 2.0 ba · 1,228 sqft · Built 1938 · MultiFamily · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,451/mo
• Mortgage (P&I): −$1,914
• Tax + insurance: −$533
• HOA: −$0
• Vac / Maint / Mgmt: −$725
• Net cashflow: $280/mo
• Annual: $3,354/yr
• Cap rate: 7.21%
• Cash-on-cash: 3.28%
• DSCR: 1.15
• 1% rule: 0.95%
• Cash to close: $102,200

Investor read

• This is a 2 × 1-bed/1-bath units multifamily listed at $365k.
• At list price, monthly cash flow is $280 ($3k/yr) — positive. Per door: $140/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $345k (5.5% below list).
• It's been on market 34 days — a 3% lower offer ($354k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $345k (5.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k 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: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.2%/yr); 197 active listings in the ZIP; 40 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 $15k; list at $365k implies a 2333% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: 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 7.2% 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 $3,451/mo this rent would consume 59% of the median local household income ($70k/yr) (locally 1402% 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 34 days. Have you received any prior offers? Is the seller open to a 5% 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 1938 — 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.
• 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?
• 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?