424 Freeman St

Baltimore, MD 21225

$118,000C

2 bd · 1.0 ba · 752 sqft · Built 1923 · Townhouse · Active · 144 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,586/mo
• Mortgage (P&I): −$619
• Tax + insurance: −$179
• HOA: −$0
• Vac / Maint / Mgmt: −$333
• Net cashflow: $455/mo
• Annual: $5,465/yr
• Cap rate: 10.92%
• Cash-on-cash: 16.54%
• DSCR: 1.74
• 1% rule: 1.34%
• Cash to close: $33,040

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $118k.
• At list price, monthly cash flow is $455 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $118k).
• It's been on market 144 days — a 12% lower offer ($104k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $816 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#90 in MD, #3,396 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, crime F.
• Baltimore City Public Schools (urban): math 7% / reading 16% proficiency, ranked #24 of 24 in MD (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 165 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 1,273 units permitted in Baltimore city in 2024 (1,104 in 5+ unit buildings).
• Baltimore County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 7 sale attempts since 18y ago; this cycle's ask has dropped $57k (33%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $33k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.9% vs local median 6.0% in Baltimore — 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 35% of the median local income ($54k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 144 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1923 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.