978 Gibraltar Rd

Key Largo, FL 33037

$680,000D

4 bd · 2.0 ba · 1,484 sqft · Built 1984 · MultiFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,427/mo
• Mortgage (P&I): −$3,566
• Tax + insurance: −$1,094
• HOA: −$0
• Vac / Maint / Mgmt: −$1,140
• Net cashflow: $-372/mo
• Annual: $-4,468/yr
• Cap rate: 6.39%
• Cash-on-cash: 0.34%
• DSCR: 1.02
• 1% rule: 0.80%
• Cash to close: $190,400

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $680k.
• At list price, monthly cash flow is $-372 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $614k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $543k (20.2% below list).
• It's been on market 23 days — a 2% lower offer ($670k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $543k (20.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#337 in FL) — a middle-class / working-renter tenant base. Strengths: crime A+, health & safety A+, employment B; Watch: amenities F, cost of living F.
• Monroe (town): math 50% / reading 55% proficiency, ranked #23 of 73 in FL (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Key Largo School (math 49% / reading 51%, grade D+, #1,070 of 2,144 statewide, top 51%, 773 students, 55% FRL); Coral Shores High School (math 39% / reading 51%, grade D-, #228 of 667 statewide, top 35%, 767 students, 41% FRL) — zoned schools at 48% FRL track the district average.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents rising (+2.9%/yr); 430 active listings in the ZIP; solid renter incomes; 332 units permitted in Monroe County in 2024 (42 in 5+ unit buildings).
• Monroe County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 23y 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 $400k; list at $680k implies a 70% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→31/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 1.5% in Key Largo — 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 $5,427/mo this rent would consume 75% of the median local household income ($87k/yr) (locally 265% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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 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.