321 Wallace St

Erie, PA 16507

$120,000C-

2 bd · 1.0 ba · 1,344 sqft · Built 1892 · SingleFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,139/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$239
• Net cashflow: $120/mo
• Annual: $1,445/yr
• Cap rate: 7.50%
• Cash-on-cash: 4.30%
• DSCR: 1.19
• 1% rule: 0.95%
• Cash to close: $33,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $120 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $114k (5.0% below list).
• It's been on market 16 days — a 2% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (5.0% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($830 loan paydown + $5k appreciation (4.2% local appreciation)).
• 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.
• Erie City SD (urban): math 12% / reading 19% proficiency, ranked #510 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1892 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 39 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 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.
• Current owner paid $22k; list at $120k implies a 445% gain — meaningful room to come down on a strong offer.
• At projected returns (4.2% appreciation + 0.1% rent growth), your $34k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 7.5% vs local median 5.2% in Erie — 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.
• This rent runs 41% of the median local income ($33k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1892 — 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.
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.