325 W Jefferson St

Butler, PA 16001

$2,450,000B

None bd · None ba · — sqft · Built — · MultiFamily · Active · 215 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $36,462/mo
• Mortgage (P&I): −$12,848
• Tax + insurance: −$2,006
• HOA: −$0
• Vac / Maint / Mgmt: −$7,657
• Net cashflow: $13,951/mo
• Annual: $167,417/yr
• Cap rate: 13.16%
• Cash-on-cash: 24.52%
• DSCR: 2.09
• 1% rule: 1.49%
• Cash to close: $686,000

Investor read

• This is a multifamily listed at $2.45M.
• At list price, monthly cash flow is $14k ($167k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($36k rent vs $2.45M).
• It's been on market 215 days — a 12% lower offer ($2.16M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.16M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $74k 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: flood insurance adds $66/mo.
• Market conditions: Rents rising fast (+20.4%/yr); 206 active listings in the ZIP; 38 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 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; this cycle's ask has dropped $550k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $686k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.2% vs local median 6.3% 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.
• At $36,462/mo this rent would consume 688% of the median local household income ($64k/yr) (locally 1441% 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 215 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.