1918 Locust St

Madison, IN 47250

$215,900D-

3 bd · 1.0 ba · 1,596 sqft · Built 1958 · SingleFamily · Active · 76 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,360/mo
• Mortgage (P&I): −$1,132
• Tax + insurance: −$159
• HOA: −$0
• Vac / Maint / Mgmt: −$286
• Net cashflow: $-217/mo
• Annual: $-2,601/yr
• Cap rate: 5.09%
• Cash-on-cash: -4.30%
• DSCR: 0.81
• 1% rule: 0.63%
• Cash to close: $60,452

Investor read

• This is a 3-bed/1.0-bath single-family listed at $216k.
• At list price, monthly cash flow is $-217 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $178k (17.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $136k (37.0% below list).
• It's been on market 76 days — a 6% lower offer ($203k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (37.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#306 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, health & safety D, amenities F.
• Madison Consolidated Schools (town): math 40% / reading 47% proficiency, ranked #114 of 301 in IN (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 127 active listings in the ZIP; 94 units permitted in Jefferson County in 2024 (0 in 5+ unit buildings).
• Jefferson County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 2y 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.
• Cap rate 5.1% vs local median 2.9% in Madison — 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 76 days. Have you received any prior offers? Is the seller open to a 37% concession, seller financing, or rate buy-down credit?
• Built in 1958 — 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.