3656 Bates St

St. Louis, MO 63116

$840,000D+

16 bd · 8.0 ba · 7,056 sqft · Built 1940 · MultiFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,191/mo
• Mortgage (P&I): −$4,405
• Tax + insurance: −$898
• HOA: −$0
• Vac / Maint / Mgmt: −$1,720
• Net cashflow: $1,167/mo
• Annual: $14,009/yr
• Cap rate: 7.96%
• Cash-on-cash: 5.96%
• DSCR: 1.27
• 1% rule: 0.98%
• Cash to close: $235,200

Investor read

• This is a 8 × 2-bed/1-bath units multifamily listed at $840k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $146/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $819k (2.5% below list).
• It's been on market 83 days — a 6% lower offer ($790k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $790k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $25k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• St. Louis City (urban): math 10% / reading 18% proficiency, ranked #312 of 324 in MO (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.6%/yr); 255 active listings in the ZIP; 294 units permitted in St. Louis city in 2024 (227 in 5+ unit buildings).
• St. Louis County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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 $280k; list at $840k implies a 200% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.0% vs local median 5.0% in St. Louis — 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 $8,191/mo this rent would consume 160% of the median local household income ($61k/yr) (locally 1923% 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 83 days. Have you received any prior offers? Is the seller open to a 6% 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 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.