9507 Fern Hollow Way

Montgomery Village, MD 20886

$415,000D

3 bd · 2.5 ba · 1,884 sqft · Built 1974 · Townhouse · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,112/mo
• Mortgage (P&I): −$2,176
• Tax + insurance: −$448
• HOA: −$152
• Vac / Maint / Mgmt: −$653
• Net cashflow: $-318/mo
• Annual: $-3,822/yr
• Cap rate: 5.37%
• Cash-on-cash: -3.29%
• DSCR: 0.85
• 1% rule: 0.75%
• Cash to close: $116,200

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $415k.
• At list price, monthly cash flow is $-318 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $359k (13.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $311k (25.0% below list).
• It's been on market 38 days — a 3% lower offer ($403k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $311k (25.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#318 in MD) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: crime D-, amenities F, commute F.
• Montgomery County Public Schools (suburban): math 27% / reading 45% proficiency, ranked #3 of 24 in MD (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Whetstone Elementary (math 12% / reading 11%, grade F, #567 of 860 statewide, top 67%, 715 students, 75% FRL); Montgomery Village Middle (math 3% / reading 25%, grade F, #196 of 225 statewide, top 88%, 773 students, 80% FRL); Watkins Mill High (math 20% / reading 51%, grade F, #144 of 222 statewide, top 65%, 1,715 students, 74% FRL) — zoned schools average 77% FRL vs 26% district-wide (50 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 20% at this address vs 36% district-wide (-16 pts) — the specific schools serving this property underperform the Montgomery County Public Schools average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising fast (+4.3%/yr); 125 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 3,880 units permitted in Montgomery County in 2024 (2,054 in 5+ unit buildings).
• Montgomery County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 20y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $153k; list at $415k implies a 171% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 4.2% in Montgomery Village — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 38% of the median local income ($99k/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 38 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 D 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?
• 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?