100-102 Lyons Ave

Newark, NJ 07112

$685,000D

8 bd · 3.0 ba · — sqft · Built — · MultiFamily · Active · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,170/mo
• Mortgage (P&I): −$3,592
• Tax + insurance: −$1,208
• HOA: −$0
• Vac / Maint / Mgmt: −$1,086
• Net cashflow: $-716/mo
• Annual: $-8,592/yr
• Cap rate: 5.15%
• Cash-on-cash: -4.06%
• DSCR: 0.82
• 1% rule: 0.75%
• Cash to close: $191,800

Investor read

• This is a 2 × 4-bed/1.5-bath units multifamily listed at $685k.
• At list price, monthly cash flow is $-716 ($-9k/yr) — negative. Per door: $-358/mo.
• To cash-flow at today's rent, offer at most $581k (15.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $517k (24.5% below list).
• It's been on market 75 days — a 6% lower offer ($644k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $517k (24.5% below list) — sets the bar for 1% rule.
• In year one you build about $73k of equity ($5k loan paydown + $68k appreciation (10.0% local appreciation)).
• Location reads 67/100 on livability (#343 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, amenities A-; Watch: housing D+, crime F, employment D-.
• Newark Public School District (urban): math 9% / reading 26% proficiency, ranked #452 of 472 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Ann Street School (math 13% / reading 34%, grade F, #921 of 1,303 statewide, top 71%, 1,200 students, 78% FRL); East Side High School (math 17% / reading 22%, grade F, #357 of 399 statewide, top 90%, 2,255 students, 77% FRL) — zoned schools at 77% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+2.8%/yr); 36 active listings in the ZIP; 3,364 units permitted in Essex County in 2024 (2,551 in 5+ unit buildings).
• Essex County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• By year 2, paydown + projected appreciation supports a ~$118k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.2% vs local median 3.0% in Newark — 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 $5,170/mo this rent would consume 107% of the median local household income ($58k/yr) (locally 2148% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 75 days. Have you received any prior offers? Is the seller open to a 25% 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?