31 Mugford St

Marblehead, MA 01945

$879,000C-

3 bd · 3.0 ba · 1,378 sqft · Built 1780 · MultiFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,038/mo
• Mortgage (P&I): −$4,610
• Tax + insurance: −$901
• HOA: −$0
• Vac / Maint / Mgmt: −$1,688
• Net cashflow: $839/mo
• Annual: $10,069/yr
• Cap rate: 7.44%
• Cash-on-cash: 4.09%
• DSCR: 1.18
• 1% rule: 0.91%
• Cash to close: $246,120

Investor read

• This is a 3 × 3-bed/3.0-bath units multifamily listed at $879k.
• At list price, monthly cash flow is $839 ($10k/yr) — positive. Per door: $280/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $804k (8.6% below list).
• It's been on market 54 days — a 3% lower offer ($853k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $804k (8.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#161 in MA) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing B+; Watch: amenities F, cost of living F, health & safety F.
• Marblehead (suburban): math 58% / reading 68% proficiency, ranked #42 of 302 in MA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 9% free/reduced lunch — higher-income household profile.
• Zoned schools: Village School (math 54% / reading 63%, grade B, #49 of 305 statewide, top 16%, 555 students, 0% FRL); Marblehead High (math 71% / reading 86%, grade A-, #49 of 343 statewide, top 14%, 879 students, 0% FRL).
• Watch-outs: built in 1780 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+19.0%/yr); 49 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 1,032 units permitted in Essex County in 2024 (590 in 5+ unit buildings).
• Essex County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 18y 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 $280k; list at $879k implies a 214% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $246k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% vs local median 1.7% in Marblehead — 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 54 days. Have you received any prior offers? Is the seller open to a 9% 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 1780 — 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 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?
• 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.