872 Ridge Loop Rd

Badger, AK 99705

$389,900B

6 bd · 2.0 ba · 2,544 sqft · Built 1975 · MultiFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,617/mo
• Mortgage (P&I): −$2,045
• Tax + insurance: −$529
• HOA: −$0
• Vac / Maint / Mgmt: −$970
• Net cashflow: $1,073/mo
• Annual: $12,880/yr
• Cap rate: 9.60%
• Cash-on-cash: 11.80%
• DSCR: 1.52
• 1% rule: 1.18%
• Cash to close: $109,172

Investor read

• This is a 2 × 3-bed/1.0-bath units multifamily listed at $390k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $537/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $390k).
• It's been on market 20 days — a 2% lower offer ($384k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $384k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#49 in AK) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: cost of living C-, schools D, crime F.
• Fairbanks North Star Borough School District (urban): math 33% / reading 45% proficiency, ranked #10 of 21 in AK (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+5.1%/yr); 248 active listings in the ZIP; solid renter incomes; 1 units permitted in Fairbanks North Star Borough in 2024 (0 in 5+ unit buildings).
• Fairbanks North Star County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 5y ago; this cycle's ask is 8% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• At projected returns (-3.0% appreciation + 5.1% rent growth), your $109k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 9.6% vs local median 4.9% in Badger — 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 $4,617/mo this rent would consume 57% of the median local household income ($97k/yr) (locally 237% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1975 — 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 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.