228 Colony Rd

Newport News, VA 23602

$194,000C+

3 bd · 1.5 ba · 1,288 sqft · Built 1969 · SingleFamily · Under Contract · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,043/mo
• Mortgage (P&I): −$1,017
• Tax + insurance: −$319
• HOA: −$0
• Vac / Maint / Mgmt: −$429
• Net cashflow: $278/mo
• Annual: $3,334/yr
• Cap rate: 8.01%
• Cash-on-cash: 6.14%
• DSCR: 1.27
• 1% rule: 1.05%
• Cash to close: $54,320

Investor read

• This is a 3-bed/1.5-bath single-family listed at $194k.
• At list price, monthly cash flow is $278 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $194k).
• It's been on market 68 days — a 6% lower offer ($182k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $182k (6.0% 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 $6k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in VA, #4,018 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living A, housing A; Watch: crime F, commute F.
• Newport News City Public School District (urban): math 34% / reading 54% proficiency, ranked #112 of 131 in VA (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: T. Ryland Sanford Elementary (math 27% / reading 47%, grade F, #933 of 1,108 statewide, top 86%, 482 students, 90% FRL); Denbigh High (math 32% / reading 65%, grade D, #301 of 319 statewide, top 95%, 1,225 students, 65% FRL) — zoned schools average 78% FRL vs 55% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+13.2%/yr); 178 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 522 units permitted in Newport News city in 2024 (458 in 5+ unit buildings).
• Newport News County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $28k; list at $194k implies a 581% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $54k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.0% vs local median 4.2% in Newport News — 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 31% of the median local income ($79k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 68 days. Have you received any prior offers? Is the seller open to a 6% 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 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?
• 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.