3872 Liberty Rd

Salem, OR 97302

$7,500,000F

3960 bd · 3915.0 ba · 38,893 sqft · Built 1991 · MultiFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,116/mo
• Mortgage (P&I): −$39,331
• Tax + insurance: −$8,206
• HOA: −$0
• Vac / Maint / Mgmt: −$1,704
• Net cashflow: $-41,125/mo
• Annual: $-493,505/yr
• Cap rate: -0.29%
• Cash-on-cash: -23.50%
• DSCR: -0.05
• 1% rule: 0.11%
• Cash to close: $2,100,000

Investor read

• This is a 5 × 2-bed/2.0-bath units multifamily listed at $7.50M.
• At list price, monthly cash flow is $-41k ($-494k/yr) — negative. Per door: $-8k/mo.
• To cash-flow at today's rent, offer at most $928k (87.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $812k (89.2% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $812k (89.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $52k of loan paydown is wiped out by about $225k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#59 in OR, #2,084 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, crime F.
• Salem-Keizer SD 24J (urban): math 34% / reading 47% proficiency, ranked #103 of 183 in OR (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.8%/yr); 249 active listings in the ZIP; solid renter incomes; 1,591 units permitted in Marion County in 2024 (716 in 5+ unit buildings).
• Marion County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y 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.
• Current owner paid $5.25M; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate -0.3% vs local median 2.9% in Salem — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $8,116/mo this rent would consume 113% of the median local household income ($86k/yr) (locally 1754% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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?
• 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?
• 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?
• 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.