2 Race

Catasauqua, PA 18032

$449,900C

5 bd · 3.0 ba · 3,512 sqft · Built 1835 · MultiFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,463/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$1,147
• Net cashflow: $1,207/mo
• Annual: $14,479/yr
• Cap rate: 9.51%
• Cash-on-cash: 11.49%
• DSCR: 1.51
• 1% rule: 1.21%
• Cash to close: $125,972

Investor read

• This is a 5-bed/3.0-bath multifamily listed at $450k. Condition is rated fair.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $450k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#443 in PA, #4,039 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Catasauqua Area SD (suburban): math 23% / reading 41% proficiency, ranked #431 of 539 in PA (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Francis H Sheckler El Sch (math 27% / reading 47%, grade F, #1,004 of 1,518 statewide, top 68%, 534 students, 100% FRL); Catasauqua Ms (math 17% / reading 40%, grade F, #395 of 512 statewide, top 78%, 448 students, 100% FRL); Catasauqua Shs (math 42% / reading 24%, grade F, #325 of 437 statewide, top 75%, 473 students, 81% FRL) — zoned schools average 94% FRL vs 39% district-wide (54 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1835 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 49 active listings in the ZIP; solid renter incomes; 765 units permitted in Lehigh County in 2024 (286 in 5+ unit buildings).
• Lehigh County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $126k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.5% vs local median 4.9% in Catasauqua — 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 $5,463/mo this rent would consume 81% of the median local household income ($81k/yr) (locally 221% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1835 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?
• 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.

Repairs flagged (vision-AI assessment)

• Major: roof — The roof appears to be in poor condition, with visible wear and tear.
• Major: exterior siding — The exterior siding and paint appear to be in poor condition, with visible wear and tear.
• Major: flooring — The flooring in the interior appears to be in poor condition, with visible wear and tear.
• Major: interior walls/paint — The interior walls and paint appear to be in poor condition, with visible wear and tear.
• Major: bathrooms — The bathrooms appear to be in poor condition, with visible wear and tear.
• Major: kitchen — The kitchen appears to be in poor condition, with visible wear and tear.