5 Freeland Ter

Worcester, MA 01603

$690,000C-

9 bd · 3.0 ba · 3,198 sqft · Built 1890 · MultiFamily · Active · 161 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,935/mo
• Mortgage (P&I): −$3,618
• Tax + insurance: −$764
• HOA: −$0
• Vac / Maint / Mgmt: −$1,456
• Net cashflow: $1,097/mo
• Annual: $13,160/yr
• Cap rate: 8.20%
• Cash-on-cash: 6.81%
• DSCR: 1.30
• 1% rule: 1.01%
• Cash to close: $193,200

Investor read

• This is a 3 × 3-bed/1.0-bath units multifamily listed at $690k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $366/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $690k).
• It's been on market 161 days — a 12% lower offer ($607k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $607k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.2%/yr); 17 active listings in the ZIP; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• 12 sale attempts since 25y 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.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.2% vs local median 4.1% in Worcester — 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 $6,935/mo this rent would consume 126% of the median local household income ($66k/yr) (locally 1247% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 161 days. Have you received any prior offers? Is the seller open to a 12% 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 1890 — 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.
• 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.