25 S Locust St

Hagerstown, MD 21740

$445,000C

24 bd · None ba · 3,548 sqft · Built 1920 · MultiFamily · Active · 223 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,778/mo
• Mortgage (P&I): −$2,334
• Tax + insurance: −$421
• HOA: −$0
• Vac / Maint / Mgmt: −$1,003
• Net cashflow: $1,020/mo
• Annual: $12,245/yr
• Cap rate: 9.22%
• Cash-on-cash: 10.47%
• DSCR: 1.47
• 1% rule: 1.07%
• Cash to close: $124,600

Investor read

• This is a 2×1bd/1ba + 2×2bd/1ba units multifamily listed at $445k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive. Per door: $255/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $445k).
• It's been on market 223 days — a 12% lower offer ($392k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $392k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#83 in MD, #3,170 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: schools C-, crime F, employment F.
• Washingtion County Public Schools (suburban): math 18% / reading 33% proficiency, ranked #13 of 24 in MD (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $66/mo; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 368 active listings in the ZIP; 232 units permitted in Washington County in 2024 (12 in 5+ unit buildings).
• Current owner paid $144k; list at $445k implies a 209% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $125k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 4.4% in Hagerstown — 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 $4,778/mo this rent would consume 91% of the median local household income ($63k/yr) (locally 2832% 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 223 days. Have you received any prior offers? Is the seller open to a 12% 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 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?