25 Cumner Ave

Melrose, MA 02176

$1,249,000C

7 bd · 3.0 ba · 2,934 sqft · Built 1890 · MultiFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,085/mo
• Mortgage (P&I): −$6,550
• Tax + insurance: −$1,287
• HOA: −$0
• Vac / Maint / Mgmt: −$2,538
• Net cashflow: $1,711/mo
• Annual: $20,526/yr
• Cap rate: 7.94%
• Cash-on-cash: 5.87%
• DSCR: 1.26
• 1% rule: 0.97%
• Cash to close: $349,720

Investor read

• This is a 3 × 5-bed/4.0-bath units multifamily listed at $1.25M.
• At list price, monthly cash flow is $2k ($21k/yr) — positive. Per door: $570/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.21M (3.2% below list).
• It's been on market 21 days — a 2% lower offer ($1.23M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.21M (3.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $37k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#3 in MA, #147 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, amenities A+; Watch: cost of living F.
• Melrose (suburban): math 53% / reading 64% proficiency, ranked #71 of 302 in MA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.9%/yr); 30 active listings in the ZIP; high-income renter base; 3,670 units permitted in Middlesex County in 2024 (2,611 in 5+ unit buildings).
• Middlesex County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 60% chance of damaging wind over 30y; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.9% vs local median 2.3% in Melrose — 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 $12,085/mo this rent would consume 108% of the median local household income ($134k/yr) (locally 959% 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 1890 — 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 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?
• 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.