11 Mercer St

Paterson, NJ 07524

$480,000F

4 bd · 3.0 ba · 1,224 sqft · Built — · SingleFamily · Active · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,504/mo
• Mortgage (P&I): −$2,517
• Tax + insurance: −$677
• HOA: −$0
• Vac / Maint / Mgmt: −$526
• Net cashflow: $-1,216/mo
• Annual: $-14,593/yr
• Cap rate: 3.25%
• Cash-on-cash: -10.86%
• DSCR: 0.52
• 1% rule: 0.52%
• Cash to close: $134,400

Investor read

• This is a 4-bed/3.0-bath single-family listed at $480k.
• At list price, monthly cash flow is $-1k ($-15k/yr) — negative.
• To cash-flow at today's rent, offer at most $265k (44.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $250k (47.8% below list).
• It's been on market 136 days — a 12% lower offer ($422k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $250k (47.8% below list) — sets the bar for 1% rule.
• In year one you build about $40k of equity ($3k loan paydown + $37k appreciation (7.7% local appreciation)).
• Location reads 69/100 on livability (#293 in NJ) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A; Watch: schools D, employment D, crime F.
• Paterson Public School District (suburban): math 6% / reading 26% proficiency, ranked #458 of 472 in NJ (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 83% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 11 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 860 units permitted in Passaic County in 2024 (614 in 5+ unit buildings).
• Passaic County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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 $248k; list at $480k implies a 94% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$65k 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 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,504/mo this rent would consume 61% of the median local household income ($49k/yr) (locally 1287% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 136 days. Have you received any prior offers? Is the seller open to a 48% concession, seller financing, or rate buy-down credit?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.