3305 Spruce St

Pascagoula, MS 39581

$225,000B-

8 bd · 4.0 ba · 3,024 sqft · Built 1971 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,302/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$712
• HOA: −$0
• Vac / Maint / Mgmt: −$903
• Net cashflow: $1,507/mo
• Annual: $18,083/yr
• Cap rate: 16.60%
• Cash-on-cash: 36.83%
• DSCR: 2.64
• 1% rule: 1.91%
• Cash to close: $63,000

Investor read

• This is a 4 × 2-bed/1.5-bath units multifamily listed at $225k.
• At list price, monthly cash flow is $2k ($18k/yr) — positive. Per door: $377/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $225k).
• It's been on market 17 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $222k (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 $7k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#41 in MS) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities D-, commute F.
• Pascagoula-Gautier School District (urban): math 40% / reading 38% proficiency, ranked #41 of 130 in MS (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 79 active listings in the ZIP; lower-income renter base — watch delinquency; 516 units permitted in Jackson County in 2024 (6 in 5+ unit buildings).
• 5 sale attempts since 12y ago; this cycle's ask has dropped $20k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $63k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.6% vs local median 4.2% in Pascagoula — 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 $4,302/mo this rent would consume 136% of the median local household income ($38k/yr) (locally 965% 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 1971 — 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.
• 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.