240 Grinding Wheel Dr

Dover, DE 19904

$120,000B-

3 bd · 2.5 ba · 1,911 sqft · Built 1996 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,101/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$175
• HOA: −$0
• Vac / Maint / Mgmt: −$441
• Net cashflow: $856/mo
• Annual: $10,268/yr
• Cap rate: 14.85%
• Cash-on-cash: 30.56%
• DSCR: 2.36
• 1% rule: 1.75%
• Cash to close: $33,600

Investor read

• This is a 3-bed/2.5-bath single-family listed at $120k.
• At list price, monthly cash flow is $856 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $120k).
• It's been on market 15 days — a 2% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $118k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#38 in DE) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: schools C-, crime F, commute F.
• Capital School District (urban): math 14% / reading 31% proficiency, ranked #24 of 26 in DE (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents rising (+3.3%/yr); 225 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,201 units permitted in Kent County in 2024 (116 in 5+ unit buildings).
• Kent County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.3% rent growth), your $34k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 75% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.8% vs local median 5.2% in Dover — 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.
• This rent runs 38% of the median local income ($67k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• 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.