200 Beacon St

Worcester, MA 01610

$400,000B-

3 bd · 2.0 ba · 1,598 sqft · Built 2005 · MultiFamily · Active · 100 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,157/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$514
• HOA: −$0
• Vac / Maint / Mgmt: −$1,713
• Net cashflow: $3,833/mo
• Annual: $45,991/yr
• Cap rate: 17.79%
• Cash-on-cash: 41.06%
• DSCR: 2.83
• 1% rule: 2.04%
• Cash to close: $112,000

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $400k.
• At list price, monthly cash flow is $4k ($46k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $400k).
• It's been on market 100 days — a 9% lower offer ($364k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $364k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-0.7%/yr); year-one equity from $3k of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents soft (-2.2%/yr); 25 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• Current owner paid $15k; list at $400k implies a 2567% gain — meaningful room to come down on a strong offer.
• At projected returns (-0.7% appreciation + 0.0% rent growth), your $112k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 17.8% vs local median 4.1% in Worcester — 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 $8,157/mo this rent would consume 190% of the median local household income ($51k/yr) (locally 2517% 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 100 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• 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.
• 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.