86 S Broadway

Lawrence, MA 01843

$2,395,000B-

1444 bd · 152.0 ba · 11,800 sqft · Built 1900 · MultiFamily · Active · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $65,354/mo
• Mortgage (P&I): −$12,560
• Tax + insurance: −$3,992
• HOA: −$0
• Vac / Maint / Mgmt: −$13,724
• Net cashflow: $35,078/mo
• Annual: $420,940/yr
• Cap rate: 23.87%
• Cash-on-cash: 62.77%
• DSCR: 3.79
• 1% rule: 2.73%
• Cash to close: $670,600

Investor read

• This is a 38 × 1-bed/1-bath units multifamily listed at $2.40M. Condition is rated good.
• At list price, monthly cash flow is $35k ($421k/yr) — positive. Per door: $923/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($65k rent vs $2.40M).
• It's been on market 40 days — a 3% lower offer ($2.32M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.32M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $72k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#133 in MA) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety A+; Watch: crime C-, schools D, amenities D.
• Lawrence (suburban): math 10% / reading 19% proficiency, ranked #300 of 302 in MA (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.7%/yr); 14 active listings in the ZIP; 1,032 units permitted in Essex County in 2024 (590 in 5+ unit buildings).
• Essex County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 2.7% rent growth), your $671k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 23.9% vs local median 4.1% in Lawrence — 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 $65,354/mo this rent would consume 1160% of the median local household income ($68k/yr) (locally 1661% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 40 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1900 — 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?
• 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.