504 E Division St #506

Watertown, WI 53098

$329,900C-

None bd · None ba · 2,650 sqft · Built 1900 · MultiFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,829/mo
• Mortgage (P&I): −$1,730
• Tax + insurance: −$550
• HOA: −$0
• Vac / Maint / Mgmt: −$804
• Net cashflow: $745/mo
• Annual: $8,941/yr
• Cap rate: 9.00%
• Cash-on-cash: 9.68%
• DSCR: 1.43
• 1% rule: 1.16%
• Cash to close: $92,372

Investor read

• This is a multifamily listed at $330k. Condition is rated poor.
• At list price, monthly cash flow is $745 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $330k).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#224 in WI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities C-, employment D+, commute F.
• Watertown Unified School District (town): math 36% / reading 34% proficiency, ranked #221 of 342 in WI (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 40 active listings in the ZIP; 229 units permitted in Dodge County in 2024 (0 in 5+ unit buildings).
• Dodge County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 3y ago 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.
• Current owner paid $240k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 9.0% vs local median 2.2% in Watertown — 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 $3,829/mo this rent would consume 62% of the median local household income ($74k/yr) (locally 214% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.

Repairs flagged (vision-AI assessment)

• Major: exterior paint — Peeling paint
• Major: exterior bricks — Chipped bricks
• Major: interior paint — Peeling paint
• Major: landscaping — Overgrown vegetation