2031 E Washington Ave

Madison, WI 53704

$506,000B-

5 bd · 3.5 ba · 2,212 sqft · Built 1884 · MultiFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,877/mo
• Mortgage (P&I): −$2,654
• Tax + insurance: −$843
• HOA: −$0
• Vac / Maint / Mgmt: −$1,234
• Net cashflow: $1,146/mo
• Annual: $13,756/yr
• Cap rate: 9.01%
• Cash-on-cash: 9.71%
• DSCR: 1.43
• 1% rule: 1.16%
• Cash to close: $141,680

Investor read

• This is a 2×2bd/1ba + 1×1bd/1ba units multifamily listed at $506k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $382/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $506k).
• Only 6 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 $15k 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+.
• Madison Metropolitan School District (urban): math 35% / reading 40% proficiency, ranked #193 of 342 in WI (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: East High (math 32% / reading 42%, grade F, #123 of 483 statewide, top 28%, 1,649 students, 55% FRL).
• Watch-outs: built in 1884 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 141 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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 9.0% 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 $5,877/mo this rent would consume 95% of the median local household income ($74k/yr) (locally 2064% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1884 — 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.
• 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.