14-16 Dean St

Worcester, MA 01609

$1,200,000B-

10 bd · 5.0 ba · 5,205 sqft · Built 1940 · MultiFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,935/mo
• Mortgage (P&I): −$6,293
• Tax + insurance: −$1,482
• HOA: −$0
• Vac / Maint / Mgmt: −$3,766
• Net cashflow: $6,393/mo
• Annual: $76,719/yr
• Cap rate: 12.69%
• Cash-on-cash: 22.83%
• DSCR: 2.02
• 1% rule: 1.49%
• Cash to close: $336,000

Investor read

• This is a 8 × 2-bed/1-bath units multifamily listed at $1.20M.
• At list price, monthly cash flow is $6k ($77k/yr) — positive. Per door: $799/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.20M).
• It's been on market 16 days — a 2% lower offer ($1.18M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.18M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $36k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 44 active listings in the ZIP; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.4% rent growth), your $336k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.7% vs local median 4.1% in Worcester — 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 $17,935/mo this rent would consume 315% of the median local household income ($68k/yr) (locally 1183% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1940 — 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.