42-46 Mount Prospect Pl

Newark, NJ 07104

$599,000B-

12 bd · 6.0 ba · 19,998 sqft · Built 1837 · MultiFamily · Active · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,416/mo
• Mortgage (P&I): −$3,141
• Tax + insurance: −$998
• HOA: −$0
• Vac / Maint / Mgmt: −$1,767
• Net cashflow: $2,509/mo
• Annual: $30,109/yr
• Cap rate: 11.32%
• Cash-on-cash: 17.95%
• DSCR: 1.80
• 1% rule: 1.41%
• Cash to close: $167,720

Investor read

• This is a 3 × 6-bed/3.0-bath units multifamily listed at $599k.
• At list price, monthly cash flow is $3k ($30k/yr) — positive. Per door: $836/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $599k).
• It's been on market 65 days — a 6% lower offer ($563k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $563k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#343 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, amenities A-; Watch: schools D+, housing D+, crime F.
• Newark Public School District (urban): math 9% / reading 26% proficiency, ranked #452 of 472 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1837 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.2%/yr); 51 active listings in the ZIP; 3,364 units permitted in Essex County in 2024 (2,551 in 5+ unit buildings).
• Essex County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 7y ago; this cycle's ask is 3% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $395k; list at $599k implies a 52% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.2% rent growth), your $168k cash investment doubles in ~6 years — after that, you're playing with house money.
• 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 11.3% vs local median 3.0% in Newark — 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 $8,416/mo this rent would consume 187% of the median local household income ($54k/yr) (locally 4024% 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 65 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1837 — 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?
• 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?