3426 Essex Cir

Norfolk, VA 23513

$215,000D

3 bd · 1.0 ba · 937 sqft · Built 1949 · SingleFamily · Active · 179 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,571/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$314
• HOA: −$0
• Vac / Maint / Mgmt: −$330
• Net cashflow: $-200/mo
• Annual: $-2,406/yr
• Cap rate: 5.17%
• Cash-on-cash: -4.00%
• DSCR: 0.82
• 1% rule: 0.73%
• Cash to close: $60,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $215k.
• At list price, monthly cash flow is $-200 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $180k (16.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $157k (26.9% below list).
• It's been on market 179 days — a 12% lower offer ($189k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $157k (26.9% below list) — sets the bar for 1% rule.
• 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 83/100 on livability (#43 in VA, #1,026 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, health & safety A+; Watch: employment C-, crime F.
• Norfolk City Public School District (urban): math 27% / reading 56% proficiency, ranked #118 of 131 in VA (top 90%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 132 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 438 units permitted in Norfolk city in 2024 (273 in 5+ unit buildings).
• 7 sale attempts since 5y ago; this cycle's ask is 8% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $185k; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 80% 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 5.2% vs local median 4.0% in Norfolk — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 179 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1949 — 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.
• 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?
• 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?
• 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?