A small single-family property in South Akron with strong rent-to-price fundamentals. The house offers roughly 1,400 square feet with three bedrooms and two bathrooms, built in 1914. At the current asking price, the deal sits well below replacement cost and appears targeted toward investors seeking a value-add rental opportunity. 

Using conservative underwriting assumptions — 8% vacancy, 8% maintenance, and 10% management — the property generates approximately $9,400 in annual net operating income assuming rents around $1,300 per month.

At the asking price, the investment produces an estimated 13.8% unlevered cap rate. Even with a moderate renovation budget of $20k–$30k, the property remains within a 9–11% cap rate range, which continues to meet the Zorstack acquisition threshold.

The primary considerations for this property involve renovation scope and micro-location quality. Akron’s housing stock from this era often requires structural and systems upgrades, and rental performance can vary significantly from block to block.

Despite these risks, the deal illustrates the type of Midwest rental pricing inefficiency that continues to attract small operators and private investors.
 

1. Acquisition Snapshot

Location: Akron, Ohio
Property Type: Single Family
Year Built: 1914
Purchase Price: $68,000
Estimated Rehab (Light): ~$30,000
Total All-In Cost: $98,000

2. Stabilized Operations

Gross Annual Rent: $15,600
Vacancy (8%): $1,248
Effective Gross Income: $16,848

Total Operating Expenses: $5,903
Stabilized NOI: $9,424

Yield on Cost: 4.48%

3. Exit Assumptions

Exit Cap Rate: 13.8%
Implied Stabilized Value: $63,333

Equity Created (Value − All-In): -$41,886
Margin of Safety: -39.81%

Unlevered IRR (3-Year Hold): -7%

4. Risk Observations

• The investment outcome is highly sensitive to renovation scope. A light cosmetic renovation may preserve the cap rate, but structural or mechanical upgrades could quickly push total project cost beyond the acceptable threshold.
• Estimated rents around $1,250–$1,300 must be verified through nearby comparable leases. Small shifts in achievable rent can materially impact the final cap rate and investment performance.
• Lower-priced rental assets typically require more active management and maintenance oversight. Vacancy cycles, tenant turnover, and repair frequency should be considered when evaluating long-term operational effort.

5. Verdict

Status: FAIL

While the property presents characteristics typical of Midwest value-add rentals, the combination of renovation uncertainty, age of the structure, and rent sensitivity introduces too much execution risk relative to the expected return.

Closing Position

At the current asking price, the property initially appears attractive due to its low acquisition cost and relatively strong rent-to-price ratio. However, when conservative underwriting assumptions are applied, the margin of safety becomes narrow.

The investment outcome depends heavily on two variables: the true scope of required renovation and the reliability of projected rental income. Without confirmation of both factors, the deal cannot confidently meet the acquisition threshold established under our framework.

Verdict: REJECT