7505 Democracy Blvd Unit A430

Potomac, MD 20817

$195,000D-

1 bd · 1.0 ba · 624 sqft · Built 1960 · Condo · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,113/mo
• Mortgage (P&I): −$1,023
• Tax + insurance: −$325
• HOA: −$437
• Vac / Maint / Mgmt: −$444
• Net cashflow: $-116/mo
• Annual: $-1,387/yr
• Cap rate: 5.58%
• Cash-on-cash: -2.54%
• DSCR: 0.89
• 1% rule: 1.08%
• Cash to close: $54,600

Investor read

• This is a 1-bed/1.0-bath condo listed at $195k. Condition is rated good.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $178k (8.6% below list).
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 30 days — a 2% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $178k (8.6% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#229 in MD) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A-, housing B+; Watch: amenities F, commute F, cost of living F.
• Montgomery County Public Schools (suburban): math 27% / reading 45% proficiency, ranked #3 of 24 in MD (top 12%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ashburton Elementary (math 39% / reading 45%, grade F, #84 of 860 statewide, top 10%, 810 students, 20% FRL); North Bethesda Middle (math 36% / reading 69%, grade C+, #6 of 225 statewide, top 3%, 1,110 students, 14% FRL); Walter Johnson High (math 82% / reading 84%, grade A, #13 of 222 statewide, top 6%, 2,942 students, 18% FRL).
• Zoned-school proficiency averages 59% at this address vs 36% district-wide (+23 pts) — the actual schools serving this property are materially stronger than the Montgomery County Public Schools average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: HOA is 21% of rent.
• Market conditions: Rents rising (+2.1%/yr); 686 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 3,880 units permitted in Montgomery County in 2024 (2,054 in 5+ unit buildings).
• Montgomery County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 0.8% in Potomac — 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.
• This rent is only 10% of the median local income ($249k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Minor: Kitchen cabinets — Aesthetic update needed to modernize the space.
• Minor: Bathroom fixtures — Update to fixtures to match kitchen and bathroom style.
• Minor: Flooring — Deep cleaning or minor repairs to maintain appearance.
• Minor: Appliances — Update to newer models for a more modern look and energy efficiency.