707 E 5th St

Bethlehem, PA 18015

$210,000C

3 bd · 1.5 ba · 1,550 sqft · Built 1900 · SingleFamily · Pending · 72 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,307/mo
• Mortgage (P&I): −$1,101
• Tax + insurance: −$322
• HOA: −$0
• Vac / Maint / Mgmt: −$484
• Net cashflow: $400/mo
• Annual: $4,794/yr
• Cap rate: 8.58%
• Cash-on-cash: 8.15%
• DSCR: 1.36
• 1% rule: 1.10%
• Cash to close: $58,800

Investor read

• This is a 3-bed/1.5-bath single-family listed at $210k.
• At list price, monthly cash flow is $400 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $210k).
• It's been on market 72 days — a 6% lower offer ($197k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $197k (6.0% below list) — sets the bar for market timing.
• 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 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.2%/yr); 156 active listings in the ZIP; 37 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 567 units permitted in Northampton County in 2024 (151 in 5+ unit buildings).
• 10 sale attempts since 16y ago; this cycle's ask has dropped $15k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $170k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 7.2% rent growth), your $59k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% 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.
• At $2,307/mo this rent would consume 46% of the median local household income ($61k/yr) (locally 1525% 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 72 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.