860 Berry St NE

Cleveland, TN 37311

$220,000C

4 bd · 2.0 ba · 1,120 sqft · Built 1940 · MultiFamily · Active · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,325/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$180
• HOA: −$0
• Vac / Maint / Mgmt: −$488
• Net cashflow: $503/mo
• Annual: $6,040/yr
• Cap rate: 9.04%
• Cash-on-cash: 9.80%
• DSCR: 1.44
• 1% rule: 1.06%
• Cash to close: $61,600

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $220k.
• At list price, monthly cash flow is $503 ($6k/yr) — positive. Per door: $252/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $220k).
• It's been on market 105 days — a 9% lower offer ($200k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#55 in TN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: employment D, crime F, amenities F.
• Cleveland (urban): math 23% / reading 28% proficiency, ranked #85 of 139 in TN (top 61%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Blythe-Bower Elementary (math 16% / reading 20%, grade F, #697 of 952 statewide, top 74%, 636 students, 0% FRL) — zoned schools average 0% FRL vs 53% district-wide (53 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.0%/yr); 196 active listings in the ZIP; 768 units permitted in Bradley County in 2024 (0 in 5+ unit buildings).
• Bradley County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y 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: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.0% vs local median 3.5% in Cleveland — 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 $2,325/mo this rent would consume 59% of the median local household income ($47k/yr) (locally 1184% 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 105 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 1940 — 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.
• 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?