3589 S Ocean Blvd #506

South Palm Beach, FL 33480

$399,000C+

2 bd · 2.0 ba · 1,541 sqft · Built 1974 · Condo · Pending · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,915/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$800
• HOA: −$1,777
• Vac / Maint / Mgmt: −$1,242
• Net cashflow: $4/mo
• Annual: $48/yr
• Cap rate: 7.59%
• Cash-on-cash: 4.62%
• DSCR: 1.21
• 1% rule: 1.48%
• Cash to close: $111,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $399k.
• At list price, monthly cash flow is $4 ($48/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $399k).
• It's been on market 81 days — a 6% lower offer ($375k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $375k (6.0% below list) — sets the bar for market timing.
• In year one you build about $23k of equity ($3k loan paydown + $20k 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 30% 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 26d 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.
• Current owner paid $132k; list at $399k implies a 201% gain — meaningful room to come down on a strong offer.
• At projected returns (5.1% appreciation + 3.9% rent growth), your $112k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$37k 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→27/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $5,915/mo this rent would consume 47% of the median local household income ($151k/yr) (locally 213% 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 81 days. Have you received any prior offers? Is the seller open to a 6% 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.
• 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.