540 Ashlawn Dr

Norfolk, VA 23503

$750,000C

None bd · None ba · 4,488 sqft · Built 1978 · MultiFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,902/mo
• Mortgage (P&I): −$3,933
• Tax + insurance: −$846
• HOA: −$0
• Vac / Maint / Mgmt: −$1,659
• Net cashflow: $1,464/mo
• Annual: $17,564/yr
• Cap rate: 8.63%
• Cash-on-cash: 8.36%
• DSCR: 1.37
• 1% rule: 1.05%
• Cash to close: $210,000

Investor read

• This is a 6 × 2-bed/?-bath units multifamily listed at $750k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive. Per door: $244/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $750k).
• It's been on market 16 days — a 2% lower offer ($739k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $739k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $22k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Granby High (math 33% / reading 80%, grade C, #270 of 319 statewide, top 86%, 1,837 students, 94% FRL) — zoned schools average 94% FRL vs 59% district-wide (36 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 56% at this address vs 42% district-wide (+15 pts) — the actual schools serving this property are materially stronger than the Norfolk City Public School District average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: Rents rising fast (+4.8%/yr); 192 active listings in the ZIP; 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• 4 sale attempts 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.
• At projected returns (-3.0% appreciation + 4.8% rent growth), your $210k cash investment doubles in ~10 years — after that, you're playing with house money.
• 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 8.6% vs local median 4.0% in Norfolk — 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 $7,902/mo this rent would consume 140% of the median local household income ($68k/yr) (locally 1948% 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 1978 — 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 A-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?
• 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.