7128 Johnson St

Merrillville, IN 46410

$298,025F

3 bd · 2.5 ba · 1,616 sqft · Built 2026 · Land · Pending · 50 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,133/mo
• Mortgage (P&I): −$1,563
• Tax + insurance: −$497
• HOA: −$130
• Vac / Maint / Mgmt: −$448
• Net cashflow: $-505/mo
• Annual: $-6,056/yr
• Cap rate: 4.26%
• Cash-on-cash: -7.26%
• DSCR: 0.68
• 1% rule: 0.72%
• Cash to close: $83,447

Investor read

• This is a 3-bed/2.5-bath land listed at $298k.
• At list price, monthly cash flow is $-505 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $225k (24.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $213k (28.4% below list).
• It's been on market 50 days — a 3% lower offer ($289k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $213k (28.4% below list) — sets the bar for 1% rule.
• 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 76/100 on livability (#50 in IN, #3,393 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F, health & safety D-.
• Merrillville Community School Corporation (suburban): math 22% / reading 36% proficiency, ranked #240 of 301 in IN (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Homer Iddings Elementary School (math 22% / reading 22%, grade F, #790 of 994 statewide, top 81%, 488 students, 69% FRL); Pierce Middle School (math 18% / reading 37%, grade F, #230 of 330 statewide, top 71%, 919 students, 70% FRL); Merrillville High School (math 19% / reading 55%, grade F, #247 of 369 statewide, top 70%, 2,042 students, 64% FRL) — zoned schools average 68% FRL vs 50% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+4.1%/yr); 272 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• This rent runs 40% of the median local income ($64k/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?
• It's been on market 50 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.
• 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.