107 Franklin Ave

Portsmouth, VA 23702

$345,000F

3 bd · 2.5 ba · 1,435 sqft · Built 2026 · Land · Under Contract · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,785/mo
• Mortgage (P&I): −$1,809
• Tax + insurance: −$575
• HOA: −$0
• Vac / Maint / Mgmt: −$375
• Net cashflow: $-974/mo
• Annual: $-11,686/yr
• Cap rate: 2.91%
• Cash-on-cash: -12.10%
• DSCR: 0.46
• 1% rule: 0.52%
• Cash to close: $96,600

Investor read

• This is a 3-bed/2.5-bath land listed at $345k.
• At list price, monthly cash flow is $-974 ($-12k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (40.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $179k (48.3% below list).
• It's been on market 15 days — a 2% lower offer ($340k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $179k (48.3% below list) — sets the bar for 1% rule.
• In year one you build about $37k of equity ($2k loan paydown + $34k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#172 in VA) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment C-, crime F, commute F.
• Portsmouth City Public School District (urban): math 34% / reading 58% proficiency, ranked #107 of 131 in VA (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Victory Elementary (math 37% / reading 57%, grade D-, #794 of 1,108 statewide, top 74%, 589 students, 117% FRL); I.C. Norcom High (math 39% / reading 58%, grade D, #301 of 319 statewide, top 95%, 1,043 students, 100% FRL) — zoned schools average 108% FRL vs 60% district-wide (49 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+4.0%/yr); 65 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 300 units permitted in Portsmouth city in 2024 (112 in 5+ unit buildings).
• Current owner paid $70k; list at $345k implies a 393% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$59k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.9% vs local median 4.6% in Portsmouth — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 44% of the median local income ($49k/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?
• 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?
• 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.