1936-1938 Patti Ln

Schererville, IN 46375

$397,000D-

2 bd · 1.0 ba · 832 sqft · Built 1977 · MultiFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,882/mo
• Mortgage (P&I): −$2,082
• Tax + insurance: −$396
• HOA: −$0
• Vac / Maint / Mgmt: −$605
• Net cashflow: $-202/mo
• Annual: $-2,419/yr
• Cap rate: 5.68%
• Cash-on-cash: -2.18%
• DSCR: 0.90
• 1% rule: 0.73%
• Cash to close: $111,160

Investor read

• This is a 1×2bd/1ba + 1×3bd/2.5ba units multifamily listed at $397k.
• At list price, monthly cash flow is $-202 ($-2k/yr) — negative. Per door: $-101/mo.
• To cash-flow at today's rent, offer at most $361k (9.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $288k (27.4% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $288k (27.4% below list) — sets the bar for 1% rule.
• 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 68/100 on livability (#226 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: amenities F, commute F, health & safety F.
• Lake Central School Corporation (suburban): math 45% / reading 54% proficiency, ranked #41 of 301 in IN (top 14%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 15% free/reduced lunch — higher-income household profile.
• Zoned schools: Lake Central High School (math 46% / reading 74%, grade C+, #46 of 369 statewide, top 13%, 3,069 students, 23% FRL).
• Market conditions: 165 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 10d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 5.7% vs local median 4.0% in Schererville — 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.
• This rent runs 37% of the median local income ($93k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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 1977 — 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 B-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.