537 Hillwell Rd

Chesapeake, VA 23322

$445,000D

4 bd · 2.0 ba · 1,807 sqft · Built 1965 · SingleFamily · Active Under Contract · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,464/mo
• Mortgage (P&I): −$2,334
• Tax + insurance: −$517
• HOA: −$0
• Vac / Maint / Mgmt: −$727
• Net cashflow: $-114/mo
• Annual: $-1,368/yr
• Cap rate: 5.99%
• Cash-on-cash: -1.10%
• DSCR: 0.95
• 1% rule: 0.78%
• Cash to close: $124,600

Investor read

• This is a 4-bed/2.0-bath single-family listed at $445k.
• At list price, monthly cash flow is $-114 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $425k (4.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $346k (22.2% below list).
• It's been on market 24 days — a 2% lower offer ($438k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $346k (22.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#236 in VA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: crime C-, cost of living C-, amenities F.
• Chesapeake City Public School District (suburban): math 58% / reading 74% proficiency, ranked #31 of 131 in VA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Butts Road Primary (545 students, 13% FRL); Great Bridge High (math 60% / reading 87%, grade B+, #124 of 319 statewide, top 40%, 1,624 students, 25% FRL).
• Market conditions: Rents rising fast (+4.5%/yr); 598 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 597 units permitted in Chesapeake city in 2024 (0 in 5+ unit buildings).
• Chesapeake County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 3y 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 $375k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 80% 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 6.0% vs local median 3.7% in Chesapeake — 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 31% of the median local income ($135k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1965 — 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 A-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.