21426 Valley Forge Cir #1426

King of Prussia, PA 19406

$289,000F

2 bd · 2.0 ba · 1,254 sqft · Built 1976 · Condo · Coming Soon · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,574/mo
• Mortgage (P&I): −$1,516
• Tax + insurance: −$447
• HOA: −$643
• Vac / Maint / Mgmt: −$540
• Net cashflow: $-572/mo
• Annual: $-6,867/yr
• Cap rate: 3.92%
• Cash-on-cash: -8.49%
• DSCR: 0.62
• 1% rule: 0.89%
• Cash to close: $80,920

Investor read

• This is a 2-bed/2.0-bath condo listed at $289k.
• At list price, monthly cash flow is $-572 ($-7k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $257k (10.9% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $257k (10.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 88/100 on livability (#43 in PA, #238 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, employment A+; Watch: cost of living D.
• Upper Merion Area SD (suburban): math 49% / reading 67% proficiency, ranked #71 of 539 in PA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Caley El Sch (math 77% / reading 92%, grade A+, #14 of 1,518 statewide, top 2%, 416 students, 30% FRL); Upper Merion Ms (math 36% / reading 64%, grade C, #129 of 512 statewide, top 26%, 1,282 students, 47% FRL); Upper Merion Hs (math 75% / reading 24%, grade D+, #135 of 437 statewide, top 31%, 1,345 students, 38% FRL).
• Watch-outs: HOA is 25% of rent.
• Market conditions: Rents rising fast (+4.6%/yr); 112 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 1,936 units permitted in Montgomery County in 2024 (530 in 5+ unit buildings).
• Montgomery County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $135k; list at $289k implies a 114% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.9% vs local median 2.8% in King of Prussia — 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?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.