2122 Lincoln Way Way W

South Bend, IN 46628

$79,000B

3 bd · 2.0 ba · 1,794 sqft · Built 1927 · MultiFamily · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,487/mo
• Mortgage (P&I): −$414
• Tax + insurance: −$206
• HOA: −$0
• Vac / Maint / Mgmt: −$522
• Net cashflow: $1,344/mo
• Annual: $16,129/yr
• Cap rate: 26.71%
• Cash-on-cash: 72.92%
• DSCR: 4.24
• 1% rule: 3.15%
• Cash to close: $22,120

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $79k.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $672/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $79k).
• It's been on market 43 days — a 3% lower offer ($77k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $77k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $546 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, crime F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — 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: Coquillard Elementary School (math 2% / reading 2%, grade F, #989 of 994 statewide, top 100%, 343 students, 89% FRL); Dickinson Fine Arts Academy (math 0% / reading 5%, grade F, #329 of 330 statewide, top 100%, 449 students, 86% FRL); Washington High School (math 12% / reading 42%, grade F, #315 of 369 statewide, top 86%, 834 students, 79% FRL) — zoned schools average 85% FRL vs 66% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.6% of price; built in 1927 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.8%/yr); 424 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 6.8% rent growth), your $22k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 26.7% vs local median 4.4% in South Bend — 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 $2,487/mo this rent would consume 48% of the median local household income ($62k/yr) (locally 1024% 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 43 days. Have you received any prior offers? Is the seller open to a 3% 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 1927 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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?