1224 2nd St

Key West, FL 33040

$1,700,000C-

4 bd · 4.0 ba · 3,000 sqft · Built 1950 · MultiFamily · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $15,523/mo
• Mortgage (P&I): −$8,915
• Tax + insurance: −$1,978
• HOA: −$0
• Vac / Maint / Mgmt: −$3,260
• Net cashflow: $1,370/mo
• Annual: $16,440/yr
• Cap rate: 7.56%
• Cash-on-cash: 4.53%
• DSCR: 1.20
• 1% rule: 0.91%
• Cash to close: $476,000

Investor read

• This is a 4 × 4-bed/4.0-bath units multifamily listed at $1.70M.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $342/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.55M (8.7% below list).
• It's been on market 49 days — a 3% lower offer ($1.65M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.55M (8.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $12k of loan paydown is wiped out by about $51k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#65 in FL, #1,123 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: crime D+, cost of living F.
• Monroe (town): math 50% / reading 55% proficiency, ranked #23 of 73 in FL (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $427/mo; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 496 active listings in the ZIP; solid renter incomes; 332 units permitted in Monroe County in 2024 (42 in 5+ unit buildings).
• Monroe County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $1.00M; list at $1.70M implies a 70% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.6% vs local median 0.8% in Key West — 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 $15,523/mo this rent would consume 215% of the median local household income ($87k/yr) (locally 2502% 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 49 days. Have you received any prior offers? Is the seller open to a 9% 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 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?