609 W South Orange Ave Unit 4U

Short Hills, NJ 07079-1063

$370,000D

2 bd · 2.5 ba · 1,410 sqft · Built 1989 · Condo · Under Contract · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,005/mo
• Mortgage (P&I): −$1,940
• Tax + insurance: −$617
• HOA: −$1,197
• Vac / Maint / Mgmt: −$841
• Net cashflow: $-590/mo
• Annual: $-7,078/yr
• Cap rate: 4.38%
• Cash-on-cash: -6.83%
• DSCR: 0.70
• 1% rule: 1.08%
• Cash to close: $103,600

Investor read

• This is a 2-bed/2.5-bath condo listed at $370k. Condition is rated good.
• At list price, monthly cash flow is $-590 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $285k (23.1% below list).
• Meets the 1% rule at list price ($4k rent vs $370k).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $285k (23.1% below list) — sets the bar for cash-flow.
• In year one you build about $14k of equity ($3k loan paydown + $11k appreciation (3.0% local appreciation)).
• Location reads 67/100 on livability (#323 in NJ) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing B; Watch: amenities F, commute F, cost of living F.
• South Orange-Maplewood School District (suburban): math 33% / reading 63% proficiency, ranked #114 of 472 in NJ (top 24%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 14% free/reduced lunch — higher-income household profile.
• Zoned schools: South Mountain Elementary School (math 45% / reading 57%, grade C-, #249 of 1,303 statewide, top 19%, 618 students, 3% FRL); South Orange Middle School (math 28% / reading 68%, grade C-, #120 of 431 statewide, top 28%, 770 students, 12% FRL); Columbia High School (math 24% / reading 68%, grade D-, #133 of 399 statewide, top 34%, 1,930 students, 15% FRL) — zoned schools at 10% FRL track the district average.
• Watch-outs: HOA is 30% of rent.
• Market conditions: 1 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals leasing fast (median 10d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 6→12/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.4% vs local median 0.7% in Short Hills — 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.

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?
• 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?
• 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?
• 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.