3540 S Ocean Blvd #409

South Palm Beach, FL 33480

$289,000D

1 bd · 1.5 ba · 785 sqft · Built 1974 · Condo · Active · 188 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,197/mo
• Mortgage (P&I): −$1,516
• Tax + insurance: −$786
• HOA: −$1,100
• Vac / Maint / Mgmt: −$671
• Net cashflow: $-875/mo
• Annual: $-10,506/yr
• Cap rate: 4.43%
• Cash-on-cash: -6.66%
• DSCR: 0.70
• 1% rule: 1.11%
• Cash to close: $80,920

Investor read

• This is a 1-bed/1.5-bath condo listed at $289k.
• At list price, monthly cash flow is $-875 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $134k (53.5% below list).
• Meets the 1% rule at list price ($3k rent vs $289k).
• It's been on market 188 days — a 12% lower offer ($254k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (53.5% below list) — sets the bar for cash-flow.
• In year one you build about $17k of equity ($2k loan paydown + $15k appreciation (5.1% local appreciation)).
• Location reads 72/100 on livability (#340 in FL) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: schools C-, amenities F, commute F.
• Palm Beach (suburban): math 46% / reading 53% proficiency, ranked #34 of 73 in FL (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; HOA is 34% of rent.
• Market conditions: Rents rising (+3.9%/yr); 447 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 3,974 units permitted in Palm Beach County in 2024 (1,012 in 5+ unit buildings).
• Palm Beach County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 14y ago; this cycle's ask has dropped $70k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $180k; list at $289k implies a 61% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• It's been on market 188 days. Have you received any prior offers? Is the seller open to a 54% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.