367 N Martin Luther King Blvd

Lexington-Fayette, KY 40508

$525,000B-

20 bd · 20.0 ba · 4,300 sqft · Built 1949 · MultiFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,914/mo
• Mortgage (P&I): −$2,753
• Tax + insurance: −$340
• HOA: −$0
• Vac / Maint / Mgmt: −$1,452
• Net cashflow: $2,369/mo
• Annual: $28,433/yr
• Cap rate: 11.71%
• Cash-on-cash: 19.34%
• DSCR: 1.86
• 1% rule: 1.32%
• Cash to close: $147,000

Investor read

• This is a 4 × 5-bed/5.0-bath units multifamily listed at $525k.
• At list price, monthly cash flow is $2k ($28k/yr) — positive. Per door: $592/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $525k).
• It's been on market 55 days — a 3% lower offer ($509k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $509k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Fayette County (urban): math 35% / reading 45% proficiency, ranked #27 of 165 in KY (top 16%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: William Wells Brown Elementary (math 8% / reading 12%, grade F, #648 of 676 statewide, top 98%, 308 students, 86% FRL); Lexington Trad Magnet School (math 11% / reading 29%, grade F, #206 of 217 statewide, top 95%, 296 students, 81% FRL); Frederick Douglass High School (math 36% / reading 42%, grade F, #51 of 254 statewide, top 21%, 1,667 students, 43% FRL) — zoned schools average 70% FRL vs 44% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 23% at this address vs 40% district-wide (-17 pts) — the specific schools serving this property underperform the Fayette County average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+11.8%/yr); 82 active listings in the ZIP; lower-income renter base — watch delinquency; 1,036 units permitted in Fayette County in 2024 (542 in 5+ unit buildings).
• Fayette County population projected at +35% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 23y 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 $430k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $147k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 11.7% vs local median 3.8% in Lexington-Fayette — 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.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% 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 1949 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.