2122 Bonnycastle Ave

Louisville, KY 40205

$574,900C+

42 bd · 6.0 ba · 3,937 sqft · Built 1913 · MultiFamily · Active · 110 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,095/mo
• Mortgage (P&I): −$3,015
• Tax + insurance: −$822
• HOA: −$0
• Vac / Maint / Mgmt: −$1,490
• Net cashflow: $1,769/mo
• Annual: $21,223/yr
• Cap rate: 9.98%
• Cash-on-cash: 13.18%
• DSCR: 1.59
• 1% rule: 1.23%
• Cash to close: $160,972

Investor read

• This is a 6 × 1-bed/1.0-bath units multifamily listed at $575k.
• At list price, monthly cash flow is $2k ($21k/yr) — positive. Per door: $295/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $575k).
• It's been on market 110 days — a 9% lower offer ($523k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $523k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#333 in KY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, health & safety D+, schools D-.
• Jefferson County (urban): math 19% / reading 35% proficiency, ranked #121 of 165 in KY (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1913 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.4%/yr); 127 active listings in the ZIP; solid renter incomes; 2,836 units permitted in Jefferson County in 2024 (1,558 in 5+ unit buildings).
• Jefferson County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 6y 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 $460k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 5.4% rent growth), your $161k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.0% vs local median 5.0% in Louisville — 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 $7,095/mo this rent would consume 85% of the median local household income ($100k/yr) (locally 492% 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 110 days. Have you received any prior offers? Is the seller open to a 9% 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 1913 — 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 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?
• 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?