5405 Emerson Way

Anderson, IN 46017

$225,000D-

2 bd · 1.5 ba · 1,384 sqft · Built 1974 · SingleFamily · Pending · 119 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,347/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$197
• HOA: −$0
• Vac / Maint / Mgmt: −$283
• Net cashflow: $-312/mo
• Annual: $-3,748/yr
• Cap rate: 4.63%
• Cash-on-cash: -5.95%
• DSCR: 0.74
• 1% rule: 0.60%
• Cash to close: $63,000

Investor read

• This is a 2-bed/1.5-bath single-family listed at $225k.
• At list price, monthly cash flow is $-312 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $170k (24.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $135k (40.1% below list).
• It's been on market 119 days — a 9% lower offer ($205k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $135k (40.1% below list) — sets the bar for 1% rule.
• In year one you build about $12k of equity ($2k loan paydown + $10k appreciation (4.6% local appreciation)).
• Location reads 60/100 on livability (#521 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools F, crime D-, amenities F.
• Anderson Community School Corporation (urban): math 15% / reading 23% proficiency, ranked #280 of 301 in IN (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 29 active listings in the ZIP; 184 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• By year 4, paydown + projected appreciation supports a ~$40k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.6% vs local median 6.5% in Anderson — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 119 days. Have you received any prior offers? Is the seller open to a 40% concession, seller financing, or rate buy-down credit?
• Built in 1974 — 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 F-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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?