126 Pleasant St

Marblehead, MA 01945

$1,875,000C

4 bd · 7.0 ba · 5,579 sqft · Built 1940 · MultiFamily · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $16,099/mo
• Mortgage (P&I): −$9,833
• Tax + insurance: −$1,432
• HOA: −$0
• Vac / Maint / Mgmt: −$3,381
• Net cashflow: $1,453/mo
• Annual: $17,440/yr
• Cap rate: 7.22%
• Cash-on-cash: 3.32%
• DSCR: 1.15
• 1% rule: 0.86%
• Cash to close: $525,000

Investor read

• This is a 4×2bd/1ba + 2×1bd/1ba units multifamily listed at $1.88M.
• At list price, monthly cash flow is $1k ($17k/yr) — positive. Per door: $242/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 $1.61M (14.1% below list).
• It's been on market 68 days — a 6% lower offer ($1.76M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.61M (14.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $13k of loan paydown is wiped out by about $56k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#161 in MA) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, schools A-; Watch: amenities F, cost of living F, health & safety F.
• Marblehead (suburban): math 58% / reading 68% proficiency, ranked #42 of 302 in MA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 9% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+19.0%/yr); 50 active listings in the ZIP; high-income renter base; 1,032 units permitted in Essex County in 2024 (590 in 5+ unit buildings).
• Essex County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $525k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.2% vs local median 1.7% in Marblehead — 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 $16,099/mo this rent would consume 108% of the median local household income ($180k/yr) (locally 333% 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 68 days. Have you received any prior offers? Is the seller open to a 14% 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 1940 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.