3910 S 1040 E

Millcreek, UT 84124

$2,100,000B-

256 bd · 128.0 ba · 7,376 sqft · Built 1968 · MultiFamily · Under Contract · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $34,774/mo
• Mortgage (P&I): −$11,013
• Tax + insurance: −$1,910
• HOA: −$0
• Vac / Maint / Mgmt: −$7,303
• Net cashflow: $14,549/mo
• Annual: $174,583/yr
• Cap rate: 14.61%
• Cash-on-cash: 29.69%
• DSCR: 2.32
• 1% rule: 1.66%
• Cash to close: $588,000

Investor read

• This is a 16 × 16-bed/?-bath units multifamily listed at $2.10M.
• At list price, monthly cash flow is $15k ($175k/yr) — positive. Per door: $909/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($35k rent vs $2.10M).
• It's been on market 21 days — a 2% lower offer ($2.07M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.07M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $15k of loan paydown is wiped out by about $63k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#14 in UT, #555 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, amenities A; Watch: cost of living F.
• Granite District (suburban): math 26% / reading 32% proficiency, ranked #69 of 80 in UT (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: James E. Moss School (math 17% / reading 11%, grade F, #564 of 585 statewide, top 97%, 506 students, 72% FRL); Bonneville Jr High (math 31% / reading 42%, grade F, #88 of 138 statewide, top 66%, 604 students, 35% FRL); Cottonwood High (math 18% / reading 34%, grade F, #137 of 171 statewide, top 81%, 1,585 students, 49% FRL).
• Market conditions: Rents flat; 122 active listings in the ZIP; high-income renter base; 4,970 units permitted in Salt Lake County in 2024 (1,963 in 5+ unit buildings).
• Salt Lake County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 1.0% rent growth), your $588k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• At $34,774/mo this rent would consume 347% of the median local household income ($120k/yr) (locally 264% 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 1968 — 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 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?
• 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.