3500 Forest Edge Dr Unit 15-2E

Leisure World, MD 20906

$180,000D

2 bd · 2.0 ba · 1,157 sqft · Built 1977 · Condo · Active · 140 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,186/mo
• Mortgage (P&I): −$944
• Tax + insurance: −$198
• HOA: −$844
• Vac / Maint / Mgmt: −$459
• Net cashflow: $-259/mo
• Annual: $-3,104/yr
• Cap rate: 4.57%
• Cash-on-cash: -6.16%
• DSCR: 0.73
• 1% rule: 1.21%
• Cash to close: $50,400

Investor read

• This is a 2-bed/2.0-bath condo listed at $180k.
• At list price, monthly cash flow is $-259 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $134k (25.4% below list).
• Meets the 1% rule at list price ($2k rent vs $180k).
• It's been on market 140 days — a 12% lower offer ($158k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (25.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#158 in MD) — a middle-class / working-renter tenant base. Strengths: housing A, employment B+, commute B; Watch: cost of living C-, health & safety C-, amenities D-.
• Montgomery County Public Schools (suburban): math 27% / reading 45% proficiency, ranked #3 of 24 in MD (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Flower Valley Elementary (math 28% / reading 38%, grade F, #169 of 860 statewide, top 20%, 540 students, 33% FRL); Earle B. Wood Middle (math 14% / reading 45%, grade F, #67 of 225 statewide, top 32%, 1,068 students, 50% FRL); Rockville High (math 47% / reading 72%, grade C+, #73 of 222 statewide, top 34%, 1,516 students, 50% FRL) — zoned schools average 44% FRL vs 26% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 39% of rent.
• Market conditions: Rents flat; 246 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 3,880 units permitted in Montgomery County in 2024 (2,054 in 5+ unit buildings).
• Montgomery County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 27y ago; this cycle's ask has dropped $20k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $120k; list at $180k implies a 50% gain — meaningful room to come down on a strong offer.
• Cap rate 4.6% vs local median 2.4% in Leisure World — 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?
• It's been on market 140 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1977 — 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?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?