20456 Ragtop Xing

Long Neck, DE 19951

$475,000D+

2 bd · 3.0 ba · 3,128 sqft · Built 2019 · SingleFamily · Active · 373 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,400/mo
• Mortgage (P&I): −$2,491
• Tax + insurance: −$285
• HOA: −$200
• Vac / Maint / Mgmt: −$714
• Net cashflow: $-290/mo
• Annual: $-3,482/yr
• Cap rate: 5.56%
• Cash-on-cash: -2.62%
• DSCR: 0.88
• 1% rule: 0.72%
• Cash to close: $133,000

Investor read

• This is a 2-bed/3.0-bath single-family listed at $475k.
• At list price, monthly cash flow is $-290 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $424k (10.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $340k (28.4% below list).
• It's been on market 373 days — a 12% lower offer ($418k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $340k (28.4% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($3k loan paydown + $2k appreciation (0.4% local appreciation)).
• Location reads 69/100 on livability (#30 in DE) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: employment D+, amenities F, commute F.
• Cape Henlopen School District (town): math 42% / reading 55% proficiency, ranked #5 of 26 in DE (top 19%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Rehoboth Elementary School (math 51% / reading 60%, grade C, #8 of 105 statewide, top 8%, 525 students, 0% FRL); Beacon Middle School (math 49% / reading 62%, grade B-, #1 of 36 statewide, top 0%, 648 students, 0% FRL); Cape Henlopen High School (math 26% / reading 51%, grade F, #14 of 40 statewide, top 33%, 1,813 students, 0% FRL) — zoned schools average 0% FRL vs 41% district-wide (41 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 122 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 4,354 units permitted in Sussex County in 2024 (344 in 5+ unit buildings).
• Sussex County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 6, paydown + projected appreciation supports a ~$33k 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→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 3.4% in Long Neck — 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.

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 373 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?
• 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 F-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.