1206 Harlem Blvd

Rockford, IL 61103

$240,000D+

4 bd · 2.0 ba · — sqft · Built 1922 · MultiFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,324/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$489
• HOA: −$0
• Vac / Maint / Mgmt: −$488
• Net cashflow: $88/mo
• Annual: $1,056/yr
• Cap rate: 7.01%
• Cash-on-cash: 2.56%
• DSCR: 1.11
• 1% rule: 0.97%
• Cash to close: $67,200

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $240k.
• At list price, monthly cash flow is $88 ($1k/yr) — positive. Per door: $44/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 $232k (3.2% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $232k (3.2% 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 $7k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#876 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Rockford SD 205 (urban): math 12% / reading 16% proficiency, ranked #533 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: R K Welsh Elem School (math 7% / reading 7%, grade F, #1,719 of 2,056 statewide, top 84%, 435 students, 0% FRL); West Middle School (math 3% / reading 11%, grade F, #627 of 665 statewide, top 95%, 849 students, 0% FRL); Guilford High School (math 15% / reading 28%, grade F, #345 of 693 statewide, top 50%, 2,071 students, 0% FRL) — zoned schools average 0% FRL vs 73% district-wide (73 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: flood insurance adds $56/mo; built in 1922 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.1%/yr); 105 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 285 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 7 sale attempts since 5y 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 $120k; list at $240k implies a 100% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• At $2,324/mo this rent would consume 55% of the median local household income ($51k/yr) (locally 1402% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1922 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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?