23290 Custom House Rd

Deal Island, MD 21821

$299,900D

5 bd · 2.0 ba · 2,400 sqft · Built 2008 · SingleFamily · Active · 229 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,895/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$769
• HOA: −$0
• Vac / Maint / Mgmt: −$398
• Net cashflow: $-845/mo
• Annual: $-10,138/yr
• Cap rate: 4.62%
• Cash-on-cash: -5.98%
• DSCR: 0.73
• 1% rule: 0.63%
• Cash to close: $83,972

Investor read

• This is a 5-bed/2.0-bath single-family listed at $300k.
• At list price, monthly cash flow is $-845 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $151k (49.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $189k (36.8% below list).
• It's been on market 229 days — a 12% lower offer ($264k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $151k (49.8% below list) — sets the bar for cash-flow.
• In year one you build about $32k of equity ($2k loan paydown + $30k appreciation (10.0% local appreciation)).
• Location reads 51/100 on livability (#445 in MD) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+; Watch: schools D, crime F, amenities F.
• Somerset County Public Schools (town): math 12% / reading 23% proficiency, ranked #22 of 24 in MD (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 26 active listings in the ZIP; 49 units permitted in Somerset County in 2024 (0 in 5+ unit buildings).
• Somerset County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $20k; list at $300k implies a 1400% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$52k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 229 days. Have you received any prior offers? Is the seller open to a 50% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 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?