502 N Arthur St

South Bend, IN 46617

$365,000C

8 bd · 4.0 ba · 2,209 sqft · Built 1915 · MultiFamily · Active · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,758/mo
• Mortgage (P&I): −$1,914
• Tax + insurance: −$353
• HOA: −$0
• Vac / Maint / Mgmt: −$999
• Net cashflow: $1,491/mo
• Annual: $17,896/yr
• Cap rate: 11.20%
• Cash-on-cash: 17.51%
• DSCR: 1.78
• 1% rule: 1.30%
• Cash to close: $102,200

Investor read

• This is a 1×3bd/2ba + 2×1bd/1ba units multifamily listed at $365k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive. Per door: $497/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $365k).
• It's been on market 44 days — a 3% lower offer ($354k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $354k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, schools F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — 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.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.3%/yr); 140 active listings in the ZIP; 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• 3 sale attempts since 10y ago 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 + 3.3% rent growth), your $102k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.2% vs local median 4.4% in South Bend — 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 $4,758/mo this rent would consume 77% of the median local household income ($74k/yr) (locally 422% 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 44 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1915 — 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.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.