905 Byars Ave

Lexington-Fayette, KY 40505

$168,500B-

4 bd · 2.0 ba · 1,527 sqft · Built 1948 · MultiFamily · Active · 150 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,539/mo
• Mortgage (P&I): −$884
• Tax + insurance: −$128
• HOA: −$0
• Vac / Maint / Mgmt: −$533
• Net cashflow: $995/mo
• Annual: $11,935/yr
• Cap rate: 13.38%
• Cash-on-cash: 25.30%
• DSCR: 2.13
• 1% rule: 1.51%
• Cash to close: $47,180

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $168k.
• At list price, monthly cash flow is $995 ($12k/yr) — positive. Per door: $497/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $168k).
• It's been on market 150 days — a 12% lower offer ($148k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $148k (12.0% 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 $5k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Northern Elementary School (math 12% / reading 17%, grade F, #627 of 676 statewide, top 93%, 439 students, 71% FRL); Crawford Middle School (math 15% / reading 31%, grade F, #197 of 217 statewide, top 92%, 751 students, 68% FRL); Frederick Douglass High School (math 36% / reading 42%, grade F, #51 of 254 statewide, top 21%, 1,667 students, 43% FRL) — zoned schools average 61% FRL vs 44% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 26% at this address vs 40% district-wide (-14 pts) — the specific schools serving this property underperform the Fayette County average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 71 active listings in the ZIP; 18 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 12y ago; this cycle's ask has dropped $21k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 4.3% rent growth), your $47k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.4% vs local median 3.8% in Lexington-Fayette — 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 $2,539/mo this rent would consume 52% of the median local household income ($58k/yr) (locally 1232% 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 150 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 1948 — 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.
• 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.