2014 S High Point Rd

Madison, WI 53719

$422,900D+

3 bd · 2.5 ba · 1,656 sqft · Built 2026 · MultiFamily · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,023/mo
• Mortgage (P&I): −$2,218
• Tax + insurance: −$705
• HOA: −$26
• Vac / Maint / Mgmt: −$845
• Net cashflow: $230/mo
• Annual: $2,755/yr
• Cap rate: 6.94%
• Cash-on-cash: 2.33%
• DSCR: 1.10
• 1% rule: 0.95%
• Cash to close: $118,412

Investor read

• This is a 3-bed/2.5-bath multifamily listed at $423k. Condition is rated good.
• At list price, monthly cash flow is $230 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $402k (4.9% below list).
• It's been on market 25 days — a 2% lower offer ($417k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $402k (4.9% below list) — sets the bar for 1% rule.
• 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 84/100 on livability (#39 in WI, #819 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: schools C-.
• Verona Area School District (suburban): math 39% / reading 42% proficiency, ranked #113 of 342 in WI (top 33%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+4.0%/yr); 150 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 5,519 units permitted in Dane County in 2024 (3,978 in 5+ unit buildings).
• Dane County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.9% vs local median 2.4% 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.
• At $4,023/mo this rent would consume 52% of the median local household income ($92k/yr) (locally 1237% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.