37-39 Lenox Ave

Newark, NJ 07111

$600,000B-

15 bd · 9.0 ba · — sqft · Built — · MultiFamily · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,871/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$1,000
• HOA: −$0
• Vac / Maint / Mgmt: −$1,863
• Net cashflow: $2,862/mo
• Annual: $34,339/yr
• Cap rate: 12.02%
• Cash-on-cash: 20.44%
• DSCR: 1.91
• 1% rule: 1.48%
• Cash to close: $168,000

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $600k. Condition is rated average.
• At list price, monthly cash flow is $3k ($34k/yr) — positive. Per door: $954/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $600k).
• It's been on market 43 days — a 3% lower offer ($582k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $582k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#343 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, amenities A-; Watch: schools D+, housing D+, crime F.
• Irvington Public School District (suburban): math 4% / reading 23% proficiency, ranked #465 of 472 in NJ (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents soft (-0.6%/yr); 69 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.
• 3 sale attempts since 5y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $400k; list at $600k implies a 50% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $168k cash investment doubles in ~8 years — after that, you're playing with house money.
• 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 12.0% 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 $8,871/mo this rent would consume 173% of the median local household income ($62k/yr) (locally 4252% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 43 days. Have you received any prior offers? Is the seller open to a 3% 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?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: kitchen appliances — outdated and worn
• Major: bathroom fixtures — dated and worn