655 Hess St

Bethlehem, PA 18015

$224,900D

3 bd · 1.0 ba · 1,056 sqft · Built 1900 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,935/mo
• Mortgage (P&I): −$1,179
• Tax + insurance: −$306
• HOA: −$0
• Vac / Maint / Mgmt: −$406
• Net cashflow: $44/mo
• Annual: $524/yr
• Cap rate: 6.53%
• Cash-on-cash: 0.83%
• DSCR: 1.04
• 1% rule: 0.86%
• Cash to close: $62,972

Investor read

• This is a 3-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $44 ($524/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 $194k (13.9% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $194k (13.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#138 in PA, #1,122 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F.
• Bethlehem Area SD (urban): math 31% / reading 49% proficiency, ranked #342 of 539 in PA (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Fountain Hill El Sch (math 12% / reading 37%, grade F, #1,180 of 1,518 statewide, top 80%, 513 students, 86% FRL); Broughal Ms (math 7% / reading 31%, grade F, #447 of 512 statewide, top 88%, 500 students, 88% FRL); Liberty Hs (math 36% / reading 10%, grade F, #382 of 437 statewide, top 87%, 2,640 students, 50% FRL) — zoned schools average 74% FRL vs 43% district-wide (32 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 22% at this address vs 40% district-wide (-18 pts) — the specific schools serving this property underperform the Bethlehem Area SD average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.2%/yr); 159 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); 567 units permitted in Northampton County in 2024 (151 in 5+ unit buildings).
• 3 sale attempts since 3y 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 $185k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 4.3% in Bethlehem — 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.
• This rent runs 38% of the median local income ($61k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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.
• Schools are B-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.
• 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.