1842 Lasalle St

Racine, WI 53402

$174,900B

4 bd · 2.0 ba · 1,988 sqft · Built 1920 · MultiFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,938/mo
• Mortgage (P&I): −$917
• Tax + insurance: −$327
• HOA: −$0
• Vac / Maint / Mgmt: −$617
• Net cashflow: $1,077/mo
• Annual: $12,918/yr
• Cap rate: 13.68%
• Cash-on-cash: 26.38%
• DSCR: 2.17
• 1% rule: 1.68%
• Cash to close: $48,972

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $175k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $538/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $175k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#58 in WI, #1,622 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D.
• Racine Unified School District (urban): math 12% / reading 20% proficiency, ranked #335 of 342 in WI (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Roosevelt Elementary (math 2% / reading 12%, grade F, #957 of 1,041 statewide, top 92%, 215 students, 84% FRL); Starbuck - An Ib World School (math 8% / reading 21%, grade F, #366 of 383 statewide, top 96%, 509 students, 62% FRL); Horlick High (math 11% / reading 22%, grade F, #411 of 483 statewide, top 85%, 1,340 students, 67% FRL).
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 105 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 505 units permitted in Racine County in 2024 (287 in 5+ unit buildings).
• Racine County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 10y 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 $127k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.7% vs local median 3.9% in Racine — 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 $2,938/mo this rent would consume 47% of the median local household income ($76k/yr) (locally 820% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.