404 West St

Clayton, DE 19938

$171,000B-

3 bd · 1.0 ba · 1,944 sqft · Built 1900 · SingleFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,500/mo
• Mortgage (P&I): −$897
• Tax + insurance: −$140
• HOA: −$0
• Vac / Maint / Mgmt: −$525
• Net cashflow: $938/mo
• Annual: $11,254/yr
• Cap rate: 12.87%
• Cash-on-cash: 23.50%
• DSCR: 2.05
• 1% rule: 1.46%
• Cash to close: $47,880

Investor read

• This is a 3-bed/1.0-bath single-family listed at $171k.
• At list price, monthly cash flow is $938 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $171k).
• It's been on market 54 days — a 3% lower offer ($166k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $166k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#11 in DE) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Smyrna School District (rural): math 22% / reading 39% proficiency, ranked #16 of 26 in DE (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Clayton Elementary School (math 27% / reading 37%, grade F, #44 of 105 statewide, top 46%, 475 students, 0% FRL); Smyrna Middle School (math 18% / reading 41%, grade F, #16 of 36 statewide, top 43%, 1,027 students, 0% FRL); Smyrna High School (math 21% / reading 45%, grade F, #22 of 40 statewide, top 56%, 1,807 students, 0% FRL) — zoned schools average 0% FRL vs 32% district-wide (32 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 31 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,201 units permitted in Kent County in 2024 (116 in 5+ unit buildings).
• Kent County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 34y ago; this cycle's ask has dropped $19k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $48k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 62% 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 12.9% vs local median 1.9% in Clayton — 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

• It's been on market 54 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 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?
• 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.