142 Kelso Dr

Erie, PA 16505

$199,900F

2 bd · 1.0 ba · 716 sqft · Built 1940 · Other · Pending · 195 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,056/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$297
• HOA: −$38
• Vac / Maint / Mgmt: −$222
• Net cashflow: $-549/mo
• Annual: $-6,588/yr
• Cap rate: 3.00%
• Cash-on-cash: -11.77%
• DSCR: 0.48
• 1% rule: 0.53%
• Cash to close: $55,972

Investor read

• This is a 2-bed/1.0-bath other listed at $200k.
• At list price, monthly cash flow is $-549 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $103k (48.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $106k (47.2% below list).
• It's been on market 195 days — a 12% lower offer ($176k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $103k (48.5% below list) — sets the bar for cash-flow.
• 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 83/100 on livability (#109 in PA, #840 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D+, employment F.
• Millcreek Township SD (suburban): math 46% / reading 65% proficiency, ranked #105 of 539 in PA (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 72 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 364 units permitted in Erie County in 2024 (188 in 5+ unit buildings).
• Erie County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• Cap rate 3.0% vs local median 5.3% in Erie — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• It's been on market 195 days. Have you received any prior offers? Is the seller open to a 49% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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?
• 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?