3935 N Palmer St

Milwaukee, WI 53212

$169,900C+

4 bd · 2.0 ba · 2,250 sqft · Built 1894 · MultiFamily · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,514/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$186
• HOA: −$0
• Vac / Maint / Mgmt: −$528
• Net cashflow: $909/mo
• Annual: $10,907/yr
• Cap rate: 12.71%
• Cash-on-cash: 22.93%
• DSCR: 2.02
• 1% rule: 1.48%
• Cash to close: $47,572

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $170k.
• At list price, monthly cash flow is $909 ($11k/yr) — positive. Per door: $454/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $170k).
• It's been on market 26 days — a 2% lower offer ($167k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $167k (1.5% 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 $5k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#55 in WI, #1,534 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D+, schools F, crime F.
• Milwaukee School District (urban): math 10% / reading 18% proficiency, ranked #337 of 342 in WI (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1894 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.0%/yr); 131 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,017 units permitted in Milwaukee County in 2024 (803 in 5+ unit buildings).
• Milwaukee County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $132k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 5.0% rent growth), your $48k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 12.7% vs local median 5.1% in Milwaukee — 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 $2,514/mo this rent would consume 64% of the median local household income ($47k/yr) (locally 2397% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1894 — 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 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?
• 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.