225 Nautilus Dr

Madison, WI 53705

$1,450,000D

None bd · None ba · 3,675 sqft · Built 1965 · MultiFamily · Pending · 641 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,447/mo
• Mortgage (P&I): −$7,604
• Tax + insurance: −$2,664
• HOA: −$0
• Vac / Maint / Mgmt: −$2,824
• Net cashflow: $355/mo
• Annual: $4,258/yr
• Cap rate: 6.59%
• Cash-on-cash: 1.05%
• DSCR: 1.05
• 1% rule: 0.93%
• Cash to close: $406,000

Investor read

• This is a 8 × 2-bed/1-bath units multifamily listed at $1.45M.
• At list price, monthly cash flow is $355 ($4k/yr) — positive. Per door: $44/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.34M (7.3% below list).
• It's been on market 641 days — a 12% lower offer ($1.28M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.28M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $44k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#39 in WI, #819 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+.
• Madison Metropolitan School District (urban): math 35% / reading 40% proficiency, ranked #193 of 342 in WI (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Muir Elementary (math 42% / reading 37%, grade F, #490 of 1,041 statewide, top 53%, 403 students, 46% FRL); Jefferson Middle (math 28% / reading 31%, grade F, #261 of 383 statewide, top 73%, 415 students, 52% FRL); Vel Phillips Memorial High (math 43% / reading 54%, grade D, #46 of 483 statewide, top 10%, 2,025 students, 39% FRL) — zoned schools at 46% FRL track the district average.
• Market conditions: Rents rising fast (+5.5%/yr); 62 active listings in the ZIP; solid renter incomes; 5,519 units permitted in Dane County in 2024 (3,978 in 5+ unit buildings).
• Dane County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $150k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $680k; list at $1.45M implies a 113% gain — meaningful room to come down on a strong offer.
• Cap rate 6.6% vs local median 2.4% in Madison — 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 $13,447/mo this rent would consume 182% of the median local household income ($89k/yr) (locally 1320% 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 641 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?
• Built in 1965 — 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.
• 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?
• 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.