7871 Terrace Rd

San Castle, FL 33462

$419,999D-

2 bd · 2.0 ba · 944 sqft · Built 1955 · MultiFamily · Active · 84 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,720/mo
• Mortgage (P&I): −$2,203
• Tax + insurance: −$870
• HOA: −$0
• Vac / Maint / Mgmt: −$781
• Net cashflow: $-133/mo
• Annual: $-1,602/yr
• Cap rate: 5.91%
• Cash-on-cash: -1.36%
• DSCR: 0.94
• 1% rule: 0.89%
• Cash to close: $117,600

Investor read

• This is a 2 × 2-bed/2.0-bath units multifamily listed at $420k.
• At list price, monthly cash flow is $-133 ($-2k/yr) — negative. Per door: $-67/mo.
• To cash-flow at today's rent, offer at most $396k (5.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $372k (11.4% below list).
• It's been on market 84 days — a 6% lower offer ($395k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $372k (11.4% 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 67/100 on livability (#560 in FL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A; Watch: schools D, amenities F, commute F.
• Palm Beach (suburban): math 46% / reading 53% proficiency, ranked #34 of 73 in FL (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 383 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); 3,974 units permitted in Palm Beach County in 2024 (1,012 in 5+ unit buildings).
• Palm Beach County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 3y ago; this cycle's ask has dropped $80k (16%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $360k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→27/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,720/mo this rent would consume 60% of the median local household income ($74k/yr) (locally 1852% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 84 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• 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 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?