52 Sterling St

Somerville, MA 02144

$1,075,000D

4 bd · 2.0 ba · 2,112 sqft · Built 1920 · MultiFamily · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,880/mo
• Mortgage (P&I): −$5,637
• Tax + insurance: −$1,297
• HOA: −$0
• Vac / Maint / Mgmt: −$1,445
• Net cashflow: $-1,499/mo
• Annual: $-17,992/yr
• Cap rate: 4.62%
• Cash-on-cash: -5.98%
• DSCR: 0.73
• 1% rule: 0.64%
• Cash to close: $301,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $1.07M.
• At list price, monthly cash flow is $-1k ($-18k/yr) — negative. Per door: $-750/mo.
• To cash-flow at today's rent, offer at most $810k (24.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $688k (36.0% below list).
• It's been on market 44 days — a 3% lower offer ($1.04M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $688k (36.0% below list) — sets the bar for 1% rule.
• In year one you build about $49k of equity ($7k loan paydown + $42k appreciation (3.9% local appreciation)).
• Location reads 84/100 on livability (#18 in MA, #752 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Somerville (suburban): math 26% / reading 43% proficiency, ranked #223 of 302 in MA (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.2%/yr); 52 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 3,670 units permitted in Middlesex County in 2024 (2,611 in 5+ unit buildings).
• Middlesex County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $170k; list at $1.07M implies a 532% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$80k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 58% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 2.2% in Somerville — 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 $6,880/mo this rent would consume 55% of the median local household income ($150k/yr) (locally 1177% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 44 days. Have you received any prior offers? Is the seller open to a 36% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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?