845 Day Ave SW

Roanoke, VA 24016

$125,000B

5 bd · 5.0 ba · 4,012 sqft · Built 1923 · Other · Active · 182 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,857/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$153
• HOA: −$0
• Vac / Maint / Mgmt: −$390
• Net cashflow: $659/mo
• Annual: $7,910/yr
• Cap rate: 12.62%
• Cash-on-cash: 22.60%
• DSCR: 2.01
• 1% rule: 1.49%
• Cash to close: $35,000

Investor read

• This is a 5-bed/5.0-bath other listed at $125k.
• At list price, monthly cash flow is $659 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• It's been on market 182 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#163 in VA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: amenities C-, employment D, crime F.
• Roanoke City Public School District (urban): math 40% / reading 58% proficiency, ranked #102 of 131 in VA (top 78%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 91 active listings in the ZIP; 113 units permitted in Roanoke city in 2024 (0 in 5+ unit buildings).
• Roanoke County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 7y ago; this cycle's ask is 25% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $25k; list at $125k implies a 400% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.7% rent growth), your $35k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.6% vs local median 4.2% in Roanoke — 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 $1,857/mo this rent would consume 48% of the median local household income ($47k/yr) (locally 728% 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 182 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1923 — 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?
• 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.