820 Ocean Ave #201

Ocean City, NJ 08226

$339,900B

1 bd · 1.0 ba · 565 sqft · Built — · Condo · Active · 489 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,899/mo
• Mortgage (P&I): −$1,782
• Tax + insurance: −$566
• HOA: −$385
• Vac / Maint / Mgmt: −$1,029
• Net cashflow: $1,137/mo
• Annual: $13,639/yr
• Cap rate: 10.31%
• Cash-on-cash: 14.33%
• DSCR: 1.64
• 1% rule: 1.44%
• Cash to close: $95,172

Investor read

• This is a 1-bed/1.0-bath condo listed at $340k. Condition is rated good.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $340k).
• It's been on market 489 days — a 12% lower offer ($299k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $299k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k 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: 725 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $95k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 10.3% vs local median 2.6% 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.
• At $4,899/mo this rent would consume 58% of the median local household income ($102k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 489 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.