5 Anna St

Worcester, MA 01606

$594,000B+

4 bd · 2.0 ba · 2,464 sqft · Built 1898 · MultiFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,313/mo
• Mortgage (P&I): −$3,115
• Tax + insurance: −$696
• HOA: −$0
• Vac / Maint / Mgmt: −$1,746
• Net cashflow: $2,756/mo
• Annual: $33,077/yr
• Cap rate: 11.86%
• Cash-on-cash: 19.89%
• DSCR: 1.88
• 1% rule: 1.40%
• Cash to close: $166,320

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $594k.
• At list price, monthly cash flow is $3k ($33k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $594k).
• It's been on market 22 days — a 2% lower offer ($585k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $585k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: North High (math 10% / reading 28%, grade F, #313 of 343 statewide, top 92%, 1,377 students, 0% FRL) — zoned schools average 0% FRL vs 66% district-wide (66 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1898 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 19 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• Current owner paid $152k; list at $594k implies a 291% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.5% rent growth), your $166k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.9% vs local median 4.1% in Worcester — 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 $8,313/mo this rent would consume 108% of the median local household income ($92k/yr) (locally 634% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1898 — 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.
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.