422-422 1/2 Mcdowell Ave

Hagerstown, MD 21740

$250,000B-

6 bd · None ba · 2,688 sqft · Built 1900 · MultiFamily · Active · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,188/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$417
• HOA: −$0
• Vac / Maint / Mgmt: −$669
• Net cashflow: $791/mo
• Annual: $9,490/yr
• Cap rate: 10.09%
• Cash-on-cash: 13.56%
• DSCR: 1.60
• 1% rule: 1.28%
• Cash to close: $70,000

Investor read

• This is a 6-bed/?-bath multifamily listed at $250k.
• At list price, monthly cash flow is $791 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $250k).
• It's been on market 94 days — a 9% lower offer ($228k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $228k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#83 in MD, #3,170 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, health & safety A+; Watch: crime F, employment F.
• Washingtion County Public Schools (suburban): math 18% / reading 33% proficiency, ranked #13 of 24 in MD (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Ruth Ann Monroe Primary (567 students, 80% FRL); Western Heights Middle (math 6% / reading 30%, grade F, #165 of 225 statewide, top 75%, 903 students, 77% FRL); South Hagerstown High (math 30% / reading 63%, grade D-, #118 of 222 statewide, top 54%, 1,487 students, 78% FRL) — zoned schools average 78% FRL vs 39% district-wide (39 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 383 active listings in the ZIP; 232 units permitted in Washington County in 2024 (12 in 5+ unit buildings).
• 24 sale attempts since 8y 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 $130k; list at $250k implies a 92% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $70k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.1% vs local median 4.4% in Hagerstown — 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 $3,188/mo this rent would consume 61% of the median local household income ($63k/yr) (locally 2832% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 94 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.
• 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.