2806 Lake Ave

Baltimore, MD 21213

$151,000B-

3 bd · 1.5 ba · 1,164 sqft · Built 1974 · Townhouse · Active · 131 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,787/mo
• Mortgage (P&I): −$792
• Tax + insurance: −$329
• HOA: −$0
• Vac / Maint / Mgmt: −$375
• Net cashflow: $291/mo
• Annual: $3,494/yr
• Cap rate: 8.61%
• Cash-on-cash: 8.26%
• DSCR: 1.37
• 1% rule: 1.18%
• Cash to close: $42,280

Investor read

• This is a 3-bed/1.5-bath townhouse listed at $151k.
• At list price, monthly cash flow is $291 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $151k).
• It's been on market 131 days — a 12% lower offer ($133k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $133k (12.0% below list) — sets the bar for market timing.
• In year one you build about $186 of equity ($1k loan paydown + $-858 appreciation (-0.6% local appreciation)).
• Location reads 76/100 on livability (#90 in MD, #3,396 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, crime F.
• Baltimore City Public Schools (urban): math 7% / reading 16% proficiency, ranked #24 of 24 in MD (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+5.2%/yr); 319 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,273 units permitted in Baltimore city in 2024 (1,104 in 5+ unit buildings).
• Baltimore County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 10y ago; this cycle's ask has dropped $20k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $122k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-0.6% appreciation + 5.2% rent growth), your $42k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 6.0% in Baltimore — 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.
• This rent runs 42% of the median local income ($51k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 131 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?
• 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.