859 Lexington St

Norfolk, VA 23504

$199,000A-

6 bd · 2.0 ba · 2,400 sqft · Built 1899 · MultiFamily · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,158/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$321
• HOA: −$0
• Vac / Maint / Mgmt: −$663
• Net cashflow: $1,130/mo
• Annual: $13,558/yr
• Cap rate: 13.11%
• Cash-on-cash: 24.33%
• DSCR: 2.08
• 1% rule: 1.59%
• Cash to close: $55,720

Investor read

• This is a 2 × 3-bed/1.0-bath units multifamily listed at $199k. Condition is rated good.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $565/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $199k).
• It's been on market 27 days — a 2% lower offer ($196k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Jacox Elementary (math 5% / reading 20%, grade F, #1,107 of 1,108 statewide, top 100%, 568 students, 99% FRL); Blair Middle (math 29% / reading 57%, grade D-, #288 of 342 statewide, top 85%, 1,149 students, 92% FRL); Granby High (math 33% / reading 80%, grade C, #270 of 319 statewide, top 86%, 1,837 students, 94% FRL) — zoned schools average 95% FRL vs 59% district-wide (36 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1899 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.1%/yr); 164 active listings in the ZIP; lower-income renter base — watch delinquency; 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• 9 sale attempts since 6y ago; this cycle's ask has dropped $16k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 6.1% rent growth), your $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; 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 13.1% vs local median 4.0% in Norfolk — 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 per unit runs 42% of the median local income ($45k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1899 — 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?
• 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.