21157 M Street M-25

Rehoboth Beach, DE 19971

$169,500C+

3 bd · 2.0 ba · 1,200 sqft · Built 1986 · SingleFamily · Active · 58 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,976/mo
• Mortgage (P&I): −$889
• Tax + insurance: −$743
• HOA: −$0
• Vac / Maint / Mgmt: −$625
• Net cashflow: $719/mo
• Annual: $8,626/yr
• Cap rate: 14.64%
• Cash-on-cash: 29.82%
• DSCR: 2.33
• 1% rule: 1.76%
• Cash to close: $47,460

Investor read

• This is a 3-bed/2.0-bath single-family listed at $170k. Condition is rated good.
• At list price, monthly cash flow is $719 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $170k).
• It's been on market 58 days — a 3% lower offer ($164k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $164k (3.0% 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 $5k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#20 in DE) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, health & safety A+; Watch: crime F, commute F, cost of living F.
• Cape Henlopen School District (town): math 42% / reading 55% proficiency, ranked #5 of 26 in DE (top 19%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Rehoboth Elementary School (math 51% / reading 60%, grade C, #8 of 105 statewide, top 8%, 525 students, 0% FRL); Beacon Middle School (math 49% / reading 62%, grade B-, #1 of 36 statewide, top 0%, 648 students, 0% FRL); Cape Henlopen High School (math 26% / reading 51%, grade F, #14 of 40 statewide, top 33%, 1,813 students, 0% FRL) — zoned schools average 0% FRL vs 41% district-wide (41 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: flood insurance adds $460/mo.
• Market conditions: 334 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 4y ago; this cycle's ask has dropped $10k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $47k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.6% vs local median 1.1% in Rehoboth Beach — 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 35% of the median local income ($102k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 58 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 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.
• 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.