33 Johnson St

Salem, NJ 08079

$259,000D-

4 bd · 1.5 ba · 1,898 sqft · Built 1935 · SingleFamily · Pending · 112 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,370/mo
• Mortgage (P&I): −$1,358
• Tax + insurance: −$568
• HOA: −$0
• Vac / Maint / Mgmt: −$498
• Net cashflow: $-54/mo
• Annual: $-648/yr
• Cap rate: 6.04%
• Cash-on-cash: -0.89%
• DSCR: 0.96
• 1% rule: 0.92%
• Cash to close: $72,520

Investor read

• This is a 4-bed/1.5-bath single-family listed at $259k.
• At list price, monthly cash flow is $-54 ($-648/yr) — negative.
• To cash-flow at today's rent, offer at most $249k (3.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $237k (8.5% below list).
• It's been on market 112 days — a 9% lower offer ($236k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $236k (9.0% below list) — sets the bar for market timing.
• In year one you build about $806 of equity ($2k loan paydown + $-985 appreciation (-0.4% local appreciation)).
• Location reads 61/100 on livability (#462 in NJ) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, crime B; Watch: schools D, amenities F, commute F.
• Salem City School District (town): math 6% / reading 24% proficiency, ranked #464 of 472 in NJ (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 85% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 100 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 95 units permitted in Salem County in 2024 (0 in 5+ unit buildings).
• Salem County population projected at -23% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 10y 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; 40% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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.
• Cap rate 6.0% vs local median 8.4% in Salem — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $2,370/mo this rent would consume 52% of the median local household income ($55k/yr) (locally 663% 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 112 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.