931 5th St

Allentown, PA 18102

$230,000D+

4 bd · 1.0 ba · 1,632 sqft · Built 1910 · Townhouse · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,019/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$268
• HOA: −$0
• Vac / Maint / Mgmt: −$424
• Net cashflow: $121/mo
• Annual: $1,454/yr
• Cap rate: 6.93%
• Cash-on-cash: 2.26%
• DSCR: 1.10
• 1% rule: 0.88%
• Cash to close: $64,400

Investor read

• This is a 4-bed/1.0-bath townhouse listed at $230k.
• At list price, monthly cash flow is $121 ($1k/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 $202k (12.2% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $202k (12.2% 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 81/100 on livability (#171 in PA, #1,440 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D.
• Allentown City SD (urban): math 10% / reading 20% proficiency, ranked #513 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Washington El Sch (math 8%, 346 students, 99% FRL); Trexler Ms (math 2% / reading 24%, grade F, #484 of 512 statewide, top 95%, 820 students, 100% FRL); William Allen Hs (math 29% / reading 10%, grade F, #392 of 437 statewide, top 90%, 2,852 students, 87% FRL) — zoned schools average 95% FRL vs 73% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.5%/yr); 170 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); lower-income renter base — watch delinquency; 765 units permitted in Lehigh County in 2024 (286 in 5+ unit buildings).
• Lehigh County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 22y ago; this cycle's ask has dropped $30k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $80k; list at $230k implies a 188% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood 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 6.9% vs local median 5.3% in Allentown — 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.
• At $2,019/mo this rent would consume 56% of the median local household income ($43k/yr) (locally 4313% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1910 — 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 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?
• 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.