39 Cary Ave Unit 0-14

Chelsea, MA 02150

$299,000D

2 bd · 1.0 ba · 791 sqft · Built 1970 · Condo · Active · 76 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,760/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$394
• HOA: −$450
• Vac / Maint / Mgmt: −$580
• Net cashflow: $-232/mo
• Annual: $-2,779/yr
• Cap rate: 5.36%
• Cash-on-cash: -3.32%
• DSCR: 0.85
• 1% rule: 0.92%
• Cash to close: $83,720

Investor read

• This is a 2-bed/1.0-bath condo listed at $299k.
• At list price, monthly cash flow is $-232 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $258k (13.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $276k (7.7% below list).
• It's been on market 76 days — a 6% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (13.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#103 in MA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A+; Watch: schools D+, crime F, cost of living F.
• Chelsea (suburban): math 12% / reading 24% proficiency, ranked #294 of 302 in MA (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+3.0%/yr); 48 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); 2,207 units permitted in Suffolk County in 2024 (1,961 in 5+ unit buildings).
• Suffolk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 17y ago; this cycle's ask has dropped $16k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $200k; 50% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wind risk, 67% 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 5.4% vs local median 3.6% in Chelsea — 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 $2,760/mo this rent would consume 46% of the median local household income ($72k/yr) (locally 3332% 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 76 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Built in 1970 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?