658 Union St

Springfield, MA 01109

$425,000C+

5 bd · 3.0 ba · 2,801 sqft · Built 1905 · MultiFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,331/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$395
• HOA: −$0
• Vac / Maint / Mgmt: −$1,120
• Net cashflow: $1,588/mo
• Annual: $19,058/yr
• Cap rate: 10.78%
• Cash-on-cash: 16.02%
• DSCR: 1.71
• 1% rule: 1.25%
• Cash to close: $119,000

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $425k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $529/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $425k).
• It's been on market 20 days — a 2% lower offer ($419k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $419k (1.5% below list) — sets the bar for market timing.
• 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 73/100 on livability (#97 in MA) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety A+, amenities A; Watch: schools D, crime F, employment D-.
• Springfield (urban): math 13% / reading 25% proficiency, ranked #296 of 302 in MA (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1905 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 32 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 453 units permitted in Hampden County in 2024 (116 in 5+ unit buildings).
• Hampden County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 8y 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 $62k; list at $425k implies a 585% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $119k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 10.8% vs local median 5.1% in Springfield — 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 $5,331/mo this rent would consume 132% of the median local household income ($48k/yr) (locally 1322% 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 1905 — 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 D-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?
• 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.