203 Lee St

Front Royal, VA 22630

$264,000D+

2 bd · 1.0 ba · 1,456 sqft · Built 1950 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,929/mo
• Mortgage (P&I): −$1,384
• Tax + insurance: −$176
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $-36/mo
• Annual: $-436/yr
• Cap rate: 6.13%
• Cash-on-cash: -0.59%
• DSCR: 0.97
• 1% rule: 0.73%
• Cash to close: $73,920

Investor read

• This is a 2-bed/1.0-bath single-family listed at $264k.
• At list price, monthly cash flow is $-36 ($-436/yr) — negative.
• To cash-flow at today's rent, offer at most $258k (2.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $193k (26.9% below list).
• It's been on market 15 days — a 2% lower offer ($260k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (26.9% 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 $8k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#162 in VA) — a middle-class / working-renter tenant base. Strengths: health & safety A+, housing A, cost of living B+; Watch: commute F, employment D-.
• Warren County Public School District (town): math 49% / reading 64% proficiency, ranked #70 of 131 in VA (top 53%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.3%/yr); 280 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 170 units permitted in Warren County in 2024 (0 in 5+ unit buildings).
• Warren County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $56k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 3.6% in Front Royal — 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 1950 — 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 B-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.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.