3725 12th St NE #102

Washington, DC 20017

$224,900D

2 bd · 1.0 ba · 812 sqft · Built 1936 · Condo · Pending · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,387/mo
• Mortgage (P&I): −$1,179
• Tax + insurance: −$305
• HOA: −$461
• Vac / Maint / Mgmt: −$501
• Net cashflow: $-60/mo
• Annual: $-720/yr
• Cap rate: 5.97%
• Cash-on-cash: -1.14%
• DSCR: 0.95
• 1% rule: 1.06%
• Cash to close: $62,972

Investor read

• This is a 2-bed/1.0-bath condo listed at $225k.
• At list price, monthly cash flow is $-60 ($-720/yr) — negative.
• To cash-flow at today's rent, offer at most $214k (4.7% below list).
• Meets the 1% rule at list price ($2k rent vs $225k).
• It's been on market 96 days — a 9% lower offer ($205k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $205k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#1 in DC) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• District Of Columbia Public Schools (urban): math 33% / reading 40% proficiency, ranked #8 of 32 in DC (top 25%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 65% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.5%/yr); 86 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,737 units permitted in District of Columbia in 2024 (1,506 in 5+ unit buildings).
• District of Columbia County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $35k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $66k; list at $225k implies a 238% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 2.5% in Washington — 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.

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 96 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1936 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• 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?