1420 Hawthorne Ave

Two Rivers, WI 54241

$182,000B-

4 bd · 2.0 ba · 2,260 sqft · Built 1895 · MultiFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,629/mo
• Mortgage (P&I): −$954
• Tax + insurance: −$264
• HOA: −$0
• Vac / Maint / Mgmt: −$762
• Net cashflow: $1,648/mo
• Annual: $19,778/yr
• Cap rate: 17.16%
• Cash-on-cash: 38.81%
• DSCR: 2.73
• 1% rule: 1.99%
• Cash to close: $50,960

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $182k.
• At list price, monthly cash flow is $2k ($20k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $182k).
• It's been on market 37 days — a 3% lower offer ($177k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $177k (3.0% 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 $5k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#280 in WI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: amenities F, commute F, health & safety D-.
• Two Rivers Public School District (town): math 20% / reading 28% proficiency, ranked #318 of 342 in WI (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Two Rivers High (math 12% / reading 22%, grade F, #400 of 483 statewide, top 85%, 474 students, 35% FRL) — zoned schools at 35% FRL track the district average.
• Watch-outs: built in 1895 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 68 active listings in the ZIP; 100 units permitted in Manitowoc County in 2024 (0 in 5+ unit buildings).
• Manitowoc County population projected at -21% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 12y ago; this cycle's ask has dropped $13k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $60k; list at $182k implies a 204% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $51k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 17.2% vs local median 4.0% in Two Rivers — 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 $3,629/mo this rent would consume 71% of the median local household income ($61k/yr) (locally 199% 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 37 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1895 — 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.
• 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.