1401 E 5th St

Bethlehem, PA 18015

$199,900D

3 bd · 1.0 ba · 984 sqft · Built 1916 · Townhouse · Active · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,875/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$236
• HOA: −$0
• Vac / Maint / Mgmt: −$394
• Net cashflow: $197/mo
• Annual: $2,365/yr
• Cap rate: 7.48%
• Cash-on-cash: 4.23%
• DSCR: 1.19
• 1% rule: 0.94%
• Cash to close: $55,972

Investor read

• This is a 3-bed/1.0-bath townhouse listed at $200k.
• At list price, monthly cash flow is $197 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $188k (6.2% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $188k (6.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#138 in PA, #1,122 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F.
• Bethlehem Area SD (urban): math 31% / reading 49% proficiency, ranked #342 of 539 in PA (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.2%/yr); 156 active listings in the ZIP; 27 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 567 units permitted in Northampton County in 2024 (151 in 5+ unit buildings).
• 6 sale attempts since 23y 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 $122k; list at $200k implies a 64% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 7.2% rent growth), your $56k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.5% vs local median 4.3% in Bethlehem — 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.
• This rent runs 37% of the median local income ($61k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1916 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.