16379 Water Way

Delray Beach, FL 33484

$395,000D-

4 bd · 2.5 ba · 1,605 sqft · Built 1983 · Townhouse · Active · 139 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,797/mo
• Mortgage (P&I): −$2,071
• Tax + insurance: −$576
• HOA: −$559
• Vac / Maint / Mgmt: −$797
• Net cashflow: $-207/mo
• Annual: $-2,482/yr
• Cap rate: 5.66%
• Cash-on-cash: -2.24%
• DSCR: 0.90
• 1% rule: 0.96%
• Cash to close: $110,600

Investor read

• This is a 4-bed/2.5-bath townhouse listed at $395k.
• At list price, monthly cash flow is $-207 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $358k (9.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $380k (3.9% below list).
• It's been on market 139 days — a 12% lower offer ($348k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $348k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#202 in FL, #3,160 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, commute A-; Watch: cost of living C-, crime D-, amenities F.
• Palm Beach (suburban): math 46% / reading 53% proficiency, ranked #34 of 73 in FL (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Orchard View Elementary School (math 48% / reading 47%, grade D, #1,182 of 2,144 statewide, top 55%, 596 students, 76% FRL); Omni Middle School (math 66% / reading 66%, grade A-, #93 of 571 statewide, top 16%, 1,128 students, 29% FRL); Spanish River Community High School (math 64% / reading 74%, grade B, #63 of 667 statewide, top 10%, 2,578 students, 25% FRL).
• Market conditions: Rents rising fast (+4.3%/yr); 546 active listings in the ZIP; 27 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); 3,974 units permitted in Palm Beach County in 2024 (1,012 in 5+ unit buildings).
• Palm Beach County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 4.4% in Delray Beach — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $3,797/mo this rent would consume 73% of the median local household income ($62k/yr) (locally 991% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 139 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 B-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 D 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?