346 Mercer St

Butler, PA 16001

$189,000B-

7 bd · 3.0 ba · 1,872 sqft · Built 1910 · MultiFamily · Active · 174 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,349/mo
• Mortgage (P&I): −$991
• Tax + insurance: −$264
• HOA: −$0
• Vac / Maint / Mgmt: −$703
• Net cashflow: $1,391/mo
• Annual: $16,688/yr
• Cap rate: 15.12%
• Cash-on-cash: 31.53%
• DSCR: 2.40
• 1% rule: 1.77%
• Cash to close: $52,920

Investor read

• This is a 3 × 3-bed/1-bath units multifamily listed at $189k.
• At list price, monthly cash flow is $1k ($17k/yr) — positive. Per door: $464/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $189k).
• It's been on market 174 days — a 12% lower offer ($166k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $166k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#705 in PA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, schools A-; Watch: crime D-, amenities F, commute F.
• Butler Area SD (town): math 41% / reading 59% proficiency, ranked #181 of 539 in PA (top 34%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+20.4%/yr); 206 active listings in the ZIP; 987 units permitted in Butler County in 2024 (0 in 5+ unit buildings).
• Butler County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $103k; list at $189k implies a 83% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $53k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.1% vs local median 6.2% in Butler — 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 $3,349/mo this rent would consume 63% of the median local household income ($64k/yr) (locally 1441% 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 174 days. Have you received any prior offers? Is the seller open to a 12% 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 1910 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• Crime grade is D 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?