220 Mercer St

Butler, PA 16001

$130,000B+

4 bd · 2.0 ba · 1,960 sqft · Built 1940 · MultiFamily · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,111/mo
• Mortgage (P&I): −$682
• Tax + insurance: −$219
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $767/mo
• Annual: $9,199/yr
• Cap rate: 13.37%
• Cash-on-cash: 25.27%
• DSCR: 2.12
• 1% rule: 1.62%
• Cash to close: $36,400

Investor read

• This is a 1×2bd/1ba + 1×4bd/1ba units multifamily listed at $130k.
• At list price, monthly cash flow is $767 ($9k/yr) — positive. Per door: $383/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $130k).
• It's been on market 80 days — a 6% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $899 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#705 in PA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, schools A-; Watch: crime D-, amenities F, commute F.
• Butler Area SD (town): math 41% / reading 59% proficiency, ranked #181 of 539 in PA (top 34%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+20.4%/yr); 206 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 987 units permitted in Butler County in 2024 (0 in 5+ unit buildings).
• Butler County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 23y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $78k; list at $130k implies a 67% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $36k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.4% vs local median 3.8% in Butler — 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 40% of the median local income ($64k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 80 days. Have you received any prior offers? Is the seller open to a 6% 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?
• Crime grade is D 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?