135 Mercer St

Phillipsburg, NJ 08865-3041

$214,900C

3 bd · 1.0 ba · 1,378 sqft · Built 1900 · SingleFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,995/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$257
• HOA: −$0
• Vac / Maint / Mgmt: −$419
• Net cashflow: $192/mo
• Annual: $2,306/yr
• Cap rate: 7.37%
• Cash-on-cash: 3.83%
• DSCR: 1.17
• 1% rule: 0.93%
• Cash to close: $60,172

Investor read

• This is a 3-bed/1.0-bath single-family listed at $215k.
• At list price, monthly cash flow is $192 ($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 $200k (7.2% below list).
• It's been on market 20 days — a 2% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (7.2% below list) — sets the bar for 1% rule.
• In year one you build about $8k of equity ($1k loan paydown + $6k appreciation (3.0% local appreciation)).
• Location reads 76/100 on livability (#135 in NJ, #3,552 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A; Watch: schools C-, commute F.
• Phillipsburg School District (suburban): math 17% / reading 37% proficiency, ranked #381 of 472 in NJ (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 36 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 630 units permitted in Warren County in 2024 (315 in 5+ unit buildings).
• Warren County population projected at -10% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 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 $121k; list at $215k implies a 77% gain — meaningful room to come down on a strong offer.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $60k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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 7.4% vs local median 4.9% in Phillipsburg — 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

• Built in 1900 — 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.
• 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.