3120 West Ave #1st Fl.

Ocean City, NJ 08226

$850,000D

3 bd · 2.0 ba · 1,176 sqft · Built 1988 · Condo · Under Contract · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,266/mo
• Mortgage (P&I): −$4,457
• Tax + insurance: −$1,417
• HOA: −$0
• Vac / Maint / Mgmt: −$1,526
• Net cashflow: $-134/mo
• Annual: $-1,608/yr
• Cap rate: 6.10%
• Cash-on-cash: -0.68%
• DSCR: 0.97
• 1% rule: 0.85%
• Cash to close: $238,000

Investor read

• This is a 3-bed/2.0-bath condo listed at $850k. Condition is rated good.
• At list price, monthly cash flow is $-134 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $831k (2.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $727k (14.5% below list).
• It's been on market 70 days — a 6% lower offer ($799k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $727k (14.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in NJ, #1,762 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, employment A+, health & safety A+; Watch: housing D+, cost of living F.
• Ocean City School District (urban): math 31% / reading 53% proficiency, ranked #212 of 472 in NJ (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ocean City Primary School (math 54% / reading 42%, grade D, #299 of 1,303 statewide, top 23%, 280 students, 31% FRL); Ocean City Intermediate School (math 26% / reading 49%, grade F, #217 of 431 statewide, top 51%, 370 students, 27% FRL); Ocean City High School (math 33% / reading 63%, grade D, #117 of 399 statewide, top 30%, 1,215 students, 13% FRL) — zoned schools at 24% FRL track the district average.
• Market conditions: 427 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 877 units permitted in Cape May County in 2024 (35 in 5+ unit buildings).
• Cape May County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 6.1% vs local median 3.3% in Ocean City — 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?
• It's been on market 70 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.