518 Ridge St

Alton, IL 62002

$200,000C

9 bd · 5.1 ba · — sqft · Built 1940 · MultiFamily · Active · 408 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,107/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$333
• HOA: −$0
• Vac / Maint / Mgmt: −$652
• Net cashflow: $1,072/mo
• Annual: $12,868/yr
• Cap rate: 12.73%
• Cash-on-cash: 22.98%
• DSCR: 2.02
• 1% rule: 1.55%
• Cash to close: $56,000

Investor read

• This is a 3 × 3-bed/?-bath units multifamily listed at $200k. Condition is rated poor.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $357/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $200k).
• It's been on market 408 days — a 12% lower offer ($176k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $176k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#701 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A; Watch: health & safety C-, schools F, crime F.
• Alton CUSD 11 (suburban): math 12% / reading 13% proficiency, ranked #544 of 620 in IL (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 169 active listings in the ZIP; 336 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts; this cycle's ask has dropped $40k (17%) 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 $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 12.7% vs local median 6.4% in Alton — 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 $3,107/mo this rent would consume 61% of the median local household income ($61k/yr) (locally 960% 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 408 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1940 — 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?

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Severe weathering and peeling
• Major: roof inspection — Old roof may need replacement
• Major: flooring replacement — Worn-out tiles in kitchen and living areas
• Major: painting — Painted walls need fresh coats
• Major: bathroom updates — Old fixtures and dated design
• Major: kitchen updates — Basic appliances and outdated cabinetry