60 Murray Ave #2

Paterson, NJ 07501

$585,000D

6 bd · 4.0 ba · — sqft · Built 1930 · MultiFamily · Under Contract · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,933/mo
• Mortgage (P&I): −$3,068
• Tax + insurance: −$1,041
• HOA: −$0
• Vac / Maint / Mgmt: −$1,036
• Net cashflow: $-212/mo
• Annual: $-2,546/yr
• Cap rate: 5.99%
• Cash-on-cash: -1.07%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $163,800

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $585k.
• At list price, monthly cash flow is $-212 ($-3k/yr) — negative. Per door: $-106/mo.
• To cash-flow at today's rent, offer at most $554k (5.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $493k (15.7% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $493k (15.7% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($4k loan paydown + $6k appreciation (1.0% local appreciation)).
• Location reads 69/100 on livability (#293 in NJ) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A; Watch: schools D, employment D, crime F.
• Paterson Public School District (suburban): math 6% / reading 26% proficiency, ranked #458 of 472 in NJ (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $66/mo; built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+11.4%/yr); 52 active listings in the ZIP; 2 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 860 units permitted in Passaic County in 2024 (614 in 5+ unit buildings).
• Passaic County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• By year 4, paydown + projected appreciation supports a ~$36k 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→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 3.5% in Paterson — 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 $4,933/mo this rent would consume 134% of the median local household income ($44k/yr) (locally 3954% 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?
• 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?
• Built in 1930 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?