2228 Washington St

Gary, IN 46407

$199,900C

4 bd · 2.0 ba · 1,672 sqft · Built 1908 · MultiFamily · Active · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,229/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$177
• HOA: −$0
• Vac / Maint / Mgmt: −$468
• Net cashflow: $535/mo
• Annual: $6,426/yr
• Cap rate: 9.51%
• Cash-on-cash: 11.48%
• DSCR: 1.51
• 1% rule: 1.12%
• Cash to close: $55,972

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $200k.
• At list price, monthly cash flow is $535 ($6k/yr) — positive. Per door: $268/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $200k).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $3k of equity ($1k loan paydown + $2k appreciation (1.0% local appreciation)).
• Location reads 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 122 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 11y 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 $41k; list at $200k implies a 388% gain — meaningful room to come down on a strong offer.
• At projected returns (1.0% appreciation + 3.0% rent growth), your $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• At $2,229/mo this rent would consume 94% of the median local household income ($29k/yr) (locally 392% 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 1908 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.