2058 Linden Ave

Waukegan, IL 60085

$899,000D+

10 bd · 6.0 ba · 5,850 sqft · Built 1960 · MultiFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,867/mo
• Mortgage (P&I): −$4,714
• Tax + insurance: −$738
• HOA: −$0
• Vac / Maint / Mgmt: −$1,862
• Net cashflow: $1,553/mo
• Annual: $18,630/yr
• Cap rate: 8.37%
• Cash-on-cash: 7.40%
• DSCR: 1.33
• 1% rule: 0.99%
• Cash to close: $251,720

Investor read

• This is a 10-bed/6.0-bath multifamily listed at $899k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $887k (1.4% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $887k (1.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $27k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#216 in IL, #4,074 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, crime D, schools F.
• Waukegan CUSD 60 (suburban): math 7% / reading 10% proficiency, ranked #587 of 620 in IL (top 95%) — 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.
• Market conditions: Rents rising (+3.2%/yr); 86 active listings in the ZIP; 948 units permitted in Lake County in 2024 (424 in 5+ unit buildings).
• Lake County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 2y 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 $118k; list at $899k implies a 659% gain — meaningful room to come down on a strong offer.
• Cap rate 8.4% vs local median 4.6% in Waukegan — 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 $8,867/mo this rent would consume 159% of the median local household income ($67k/yr) (locally 2742% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1960 — 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 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?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.