38025 N Lee Ave

Pistakee Highlands, IL 60081

$280,000F

3 bd · 1.0 ba · 1,176 sqft · Built 1974 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,875/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$485
• HOA: −$0
• Vac / Maint / Mgmt: −$394
• Net cashflow: $-472/mo
• Annual: $-5,669/yr
• Cap rate: 4.27%
• Cash-on-cash: -7.23%
• DSCR: 0.68
• 1% rule: 0.67%
• Cash to close: $78,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $280k.
• At list price, monthly cash flow is $-472 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $197k (29.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $187k (33.0% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $187k (33.0% below list) — sets the bar for 1% rule.
• 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 65/100 on livability (#603 in IL) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, cost of living A; Watch: amenities F, commute F, health & safety F.
• Grant Chsd 124 (suburban): math 23% / reading 27% proficiency, ranked #296 of 620 in IL (top 48%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Grant Community High School (math 23% / reading 27%, grade F, #247 of 693 statewide, top 36%, 1,837 students, 0% FRL).
• Market conditions: 87 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 948 units permitted in Lake County in 2024 (424 in 5+ unit buildings).
• Lake County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 19y 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 $187k; 50% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1974 — 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.