420 Lily Ln

Lakemoor, IL 60051

$224,900D-

2 bd · 1.0 ba · 906 sqft · Built 1937 · SingleFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,955/mo
• Mortgage (P&I): −$1,179
• Tax + insurance: −$533
• HOA: −$0
• Vac / Maint / Mgmt: −$411
• Net cashflow: $-168/mo
• Annual: $-2,016/yr
• Cap rate: 5.40%
• Cash-on-cash: -3.20%
• DSCR: 0.86
• 1% rule: 0.87%
• Cash to close: $62,972

Investor read

• This is a 2-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-168 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $195k (13.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $196k (13.1% below list).
• It's been on market 17 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $195k (13.2% below list) — sets the bar for cash-flow.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 72/100 on livability (#317 in IL) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A-; Watch: amenities F, commute F.
• Mchenry Chsd 156 (suburban): math 27% / reading 30% proficiency, ranked #244 of 620 in IL (top 39%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Hilltop Elem School (math 22% / reading 22%, grade F, #940 of 2,056 statewide, top 49%, 461 students, 0% FRL); Mchenry Middle School (math 15% / reading 31%, grade F, #377 of 665 statewide, top 58%, 696 students, 0% FRL); Mchenry Community High School (2,222 students, 0% FRL).
• Watch-outs: built in 1937 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 151 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,595 units permitted in McHenry County in 2024 (485 in 5+ unit buildings).
• McHenry County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $175k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.4% vs local median 3.9% in Lakemoor — 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.

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?
• Built in 1937 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.