24671 Merlot Dr

Lewes, DE 19958

$449,000D-

3 bd · 3.0 ba · 2,097 sqft · Built 2026 · Condo · Active · 104 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,645/mo
• Mortgage (P&I): −$2,355
• Tax + insurance: −$273
• HOA: −$168
• Vac / Maint / Mgmt: −$556
• Net cashflow: $-705/mo
• Annual: $-8,466/yr
• Cap rate: 4.41%
• Cash-on-cash: -6.73%
• DSCR: 0.70
• 1% rule: 0.59%
• Cash to close: $125,720

Investor read

• This is a 3-bed/3.0-bath condo listed at $449k.
• At list price, monthly cash flow is $-705 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $354k (21.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $265k (41.1% below list).
• It's been on market 104 days — a 9% lower offer ($409k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $265k (41.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#40 in DE) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, health & safety A+; Watch: commute F, cost of living F.
• Cape Henlopen School District (town): math 42% / reading 55% proficiency, ranked #5 of 26 in DE (top 19%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents flat; 818 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.4% vs local median 1.7% in Lewes — 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.
• This rent runs 33% of the median local income ($97k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 104 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-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?
• 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?