2500 Leo St

Norfolk, VA 23504

$2,550,000B-

None bd · 4.0 ba · 19,680 sqft · Built 1969 · MultiFamily · Active · 219 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $31,668/mo
• Mortgage (P&I): −$13,372
• Tax + insurance: −$3,056
• HOA: −$0
• Vac / Maint / Mgmt: −$6,650
• Net cashflow: $8,590/mo
• Annual: $103,074/yr
• Cap rate: 10.34%
• Cash-on-cash: 14.44%
• DSCR: 1.64
• 1% rule: 1.24%
• Cash to close: $714,000

Investor read

• This is a ?-bed/4.0-bath multifamily listed at $2.55M.
• At list price, monthly cash flow is $9k ($103k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($32k rent vs $2.55M).
• It's been on market 219 days — a 12% lower offer ($2.24M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.24M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $18k of loan paydown is wiped out by about $76k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ghent K-8 (math 47% / reading 75%, grade B, #524 of 1,108 statewide, top 48%, 482 students, 97% FRL); Norview Middle (math 19% / reading 54%, grade F, #320 of 342 statewide, top 95%, 1,259 students, 89% FRL); Granby High (math 33% / reading 80%, grade C, #270 of 319 statewide, top 86%, 1,837 students, 94% FRL) — zoned schools average 93% FRL vs 59% district-wide (35 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+6.1%/yr); 122 active listings in the ZIP; lower-income renter base — watch delinquency; 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• Current owner paid $1.65M; list at $2.55M implies a 55% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 6.1% rent growth), your $714k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.3% vs local median 4.0% in Norfolk — 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 $31,668/mo this rent would consume 851% of the median local household income ($45k/yr) (locally 1531% 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 219 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1969 — 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 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 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.