Seven Units, Three Scenarios, and One Creative Finance Play That Could Change the Math Entirely
By Kelly Boulton | Kell Sells FL | Investment Consulting
Most multifamily deals come down to one question: do the numbers work at asking price?
This one is more interesting than that. The asking price is not where the opportunity lives. The opportunity lives in the vision.
This is 827-829 W Linden St, Allentown, PA. A 7-unit Victorian multifamily listed at $1,395,000. And depending on which version of this deal you execute, you are looking at three very different outcomes.
Here is the full breakdown.
The Property
827-829 W Linden St, Allentown, PA 18101
7 units | Approx. 6,050 to 6,100 sq ft |
Built Victorian era | Zoned B2 Unit mix: 3) 1bed / 1bath, 4) 2bed / 1bath, 1 laundry unit
Asking price: $1,395,000
Property taxes: $9,384/year
Look at the exterior photo and you immediately understand why this property commands attention. A row of Victorian turrets on W Linden St. Original bay windows. Character that modern construction simply cannot replicate. The interior photos show units that have already been renovated — fresh flooring, updated kitchens, clean finishes. This is not a gut job. Someone already did that work.
As of June 2025, five of seven units were occupied. The reported gross income was $126,000 annually with a reported NOI of $105,441, putting the seller's cap rate claim at 7.5%. My analysis tells a slightly different story — and a more compelling one.
The Zoning Play Nobody Is Talking About
Before I get into the three financial scenarios, I need to flag the most interesting part of this deal.
The property is zoned B2. The parcel is 40 x 140. Under Allentown's zoning code, Section 660-49 allows for off-street parking structures as an accessory use in B2 districts.
Allentown currently has no formal ADU ordinance. But when I called the city planning department directly, the planner told me you can schedule a pre-application meeting with the Allentown Development Team using nothing more than a narrative of your intention and a rough site plan. He gave me his direct contact.
Based on the parking structure language in the code, there is a credible path to a variance for accessory dwelling units on this lot. The unknown is setback requirements. But the door is open — and most investors buying this deal will never even knock on it.
The Comps
True 7-unit multifamily comps in this submarket are thin. That is normal for this asset class in a mid-sized city. The methodology I used instead: individual apartment unit sales within a half mile radius, which gives a per-square-foot value for the underlying residential product.
Address | Sale Price | Sq Ft | $/Sq Ft | Sold | Notes |
421 N Hall St | $135,000 | 760 | $178 | Apr 2025 | Closest match on size/beds |
441 N Hall St | $130,000 | 872 | $149 | Jan 2025 | |
129 N Poplar St | $200,000 | 1,467 | $136 | Jan 2025 | Likely updated |
43 N Jefferson St | $161,000 | 2,035 | $71 | Apr 2025 | Not updated |
1111 W Turner St | $250,000 | 2,714 | $92 | Apr 2025 |
Average $/sq ft across comps: $125.20
Strongest comparable: 421 N Hall St at $178/sq ft
The truest comp by size and configuration is 421 N Hall. Using $178/sq ft applied to each unit type:
Suggested offer range:
Low (by unit sq ft): $1,076,900
Mid (entire building sq ft): $1,085,800
High: $1,100,000
That is a meaningful gap from the $1,395,000 ask. The negotiation starts there.
Three Scenarios
Scenario 1: As-Is, No Value Add
Buy it, lease all seven units to market rent, hold.
At 75% LTV on a $1,395,000 purchase at 7% over 30 years:
Down payment: $348,750
Monthly debt service: $6,961
Market rent (all 7 units): $11,400/month
Monthly NOI: $3,412
Annual NOI: $40,941
Cap rate: 2.93%
This is the baseline. It is not exciting. A 2.93% cap rate at asking means you are paying a premium for what exists today. The deal needs a path to more income.
Scenario 2: Value Add with 4 Boxabl Casitas, Long-Term Rentals
Add four Boxabl casita units to the parking area using the B2 zoning variance path. Lease all 11 units as long-term rentals.
What is Boxabl you ask? First of all, not a sponsor. Second and more important, they are one of a growing number of manufacturers producing factory-built, foldable dwelling units designed to be placed on a lot and connected to existing utilities. The Boxabl Casita is their flagship unit at 361 square feet, arrives foldable on a trailer, and deploys on site. They are not alone in this space. Companies like Mighty Buildings, Cover, and ICON are each approaching the manufactured ADU market differently, from 3D-printed concrete to modular panelized systems. The common thread is speed to occupancy and a lower cost per unit than traditional stick-built construction. For a lot like this one with potential variance approval, any of these manufacturers could be worth evaluating depending on lead times and local permitting acceptance.
Casita cost assumptions:
4 Boxabl units: $360,000
Site prep x 6 pads: $420,000
City/permitting: $50,000
Total value-add investment: $830,000
Total project cost: $2,252,900
Down payment at full build-out: $563,225
At market rent across 11 units:
Total monthly gross income: $16,000
Monthly debt service: $11,241
Monthly NOI: $11,912
Annual NOI: $142,941
Annual cash flow: $8,044
Cap rate: 6.34%
Going from 7 to 11 units on the same parcel, the cap rate moves from 2.93% to 6.34%. The income jumps from $90,000 to $192,000 annually at full occupancy. Cash flow turns positive and builds.
Scenario 3: Value Add with 4 Boxabl Casitas, STR/LTR Hybrid
Same 11-unit build-out, but the four casitas run as short-term rentals while the seven original units stay long-term.
STR data from market comps within 2 miles: Average daily rate: $100 | Average occupancy: 53% | Season peaks: May through August
True 1/1 STR comps in the area average approximately $19,000 per year in revenue. Listings priced at $150 to $250 ADR are showing 7% to 10% occupancy. Pricing discipline matters here. At $100 ADR and 53% occupancy, each casita brings in approximately $6,083/month across all four units combined.
Hybrid scenario totals:
LTR gross income: $11,400/month
STR gross income: $6,083/month
Total monthly gross: $17,483
Total monthly expenses: $17,330 (higher utilities for STR side)
Monthly cash flow: $154
Annual cash flow: $1,844
Cap rate: 9.8%
The cash flow in the hybrid is thinner than the all-LTR scenario because STR utility costs eat into margin. But the cap rate at 9.8% is the strongest of the three scenarios, and there is room to optimize ADR and occupancy as the STR listings season.
The Rental Market
Long-term rental comps within half a mile:
Market supports the following for updated units:
1bed /1bath: $1,600/month
2bed/1bath: $1,600/month
2bed/2bath: $1,800/month
The current rents on this property are slightly below market. That is a near-term revenue lift available on lease renewals without any additional capital.
STR market summary:
The STR market within 2 miles shows solid fundamentals at the right price point. The properties performing best are those priced at $92 to $111 ADR with 47% to 57% occupancy. Outliers priced at $145 to $237 ADR are seeing single-digit occupancy. The data is clear: modest pricing with strong occupancy beats aggressive pricing with vacant nights.
What Makes This Deal Interesting
This is not a flip. This is not a pass. This is a hold play with a creative finance angle that most buyers will not see.
The seven existing units are already renovated. The Victorian architecture on W Linden St is irreplaceable and commands premium rent from tenants who value character. The B2 zoning with a credible ADU variance path means you are potentially buying a 7-unit deal that becomes an 11-unit deal with the right team and the right city conversations.
The asking price needs to come down. The comp methodology supports an offer in the $1,076,900 to $1,100,000 range, and that is where the negotiation should start. At that basis, the value-add scenarios become significantly more attractive.
A strategic investor looks at this deal and sees two things: what it is today, and what it could become. The as-is scenario is thin at asking. The value-add scenario is where this property earns its place in a portfolio.
The question is whether you have the capital structure, the patience for a zoning conversation, and the operational capacity to execute across 11 units. If the answer is yes, this deal deserves a very serious look.
What This Case Study Illustrates
Not every deal is a flip. Not every analysis ends in a pass or a green light. Sometimes the job is mapping out the full picture — all three versions of what a deal could be — so the investor can make a decision that fits their actual strategy.
Curiosity is the engine here. Curiosity about the zoning code. Curiosity about what the city planner might say if you just called. Curiosity about whether there is a STR market in Allentown worth modeling. A transactional investor runs the as-is numbers, sees a 2.93% cap rate, and moves on. A strategic investor asks what happens if you add four units to a lot that might allow it.
And then answers those questions honestly.
Kelly Boulton is a licensed Florida Realtor with Worth Clark Realty and founder of Kell Sells FL, an investment consulting practice based in Central Florida. She works with investors on deal analysis, creative finance, and acquisition strategy.
Kelly@kellsellsfl.com | (407) 906-8348
