48 Chestnut St

Pottstown, PA 19464

$299,999C-

4 bd · 2.0 ba · 2,011 sqft · Built 1925 · MultiFamily · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,360/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$1,063
• HOA: −$0
• Vac / Maint / Mgmt: −$706
• Net cashflow: $18/mo
• Annual: $221/yr
• Cap rate: 8.21%
• Cash-on-cash: 6.84%
• DSCR: 1.30
• 1% rule: 1.12%
• Cash to close: $84,000

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $300k.
• At list price, monthly cash flow is $18 ($221/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $300k).
• It's been on market 27 days — a 2% lower offer ($295k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $295k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#643 in PA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities C-, employment D+, crime F.
• Pottstown SD (suburban): math 11% / reading 23% proficiency, ranked #504 of 539 in PA (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Franklin El Sch (math 8% / reading 27%, grade F, #1,295 of 1,518 statewide, top 86%, 325 students, 100% FRL); Pottstown Ms (math 6% / reading 20%, grade F, #486 of 512 statewide, top 95%, 915 students, 100% FRL); Pottstown Shs (math 37% / reading 10%, grade F, #379 of 437 statewide, top 87%, 912 students, 100% FRL) — zoned schools average 100% FRL vs 62% district-wide (37 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $460/mo; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.9%/yr); 202 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,936 units permitted in Montgomery County in 2024 (530 in 5+ unit buildings).
• Montgomery County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 5y 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 $165k; list at $300k implies a 82% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.2% vs local median 5.0% in Pottstown — 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 $3,360/mo this rent would consume 51% of the median local household income ($80k/yr) (locally 1797% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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.