3712 Winchester Ave

Atlantic City, NJ 08401

$398,000F

4 bd · 2.4 ba · 1,296 sqft · Built 1920 · SingleFamily · Under Contract · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,311/mo
• Mortgage (P&I): −$2,087
• Tax + insurance: −$991
• HOA: −$0
• Vac / Maint / Mgmt: −$485
• Net cashflow: $-1,252/mo
• Annual: $-15,024/yr
• Cap rate: 3.80%
• Cash-on-cash: -8.89%
• DSCR: 0.60
• 1% rule: 0.58%
• Cash to close: $111,440

Investor read

• This is a 4-bed/2.4-bath single-family listed at $398k.
• At list price, monthly cash flow is $-1k ($-15k/yr) — negative.
• To cash-flow at today's rent, offer at most $177k (55.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $231k (41.9% below list).
• It's been on market 34 days — a 3% lower offer ($386k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $177k (55.6% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#525 in NJ) — a working-class tenant base; expect higher turnover. Strengths: health & safety A; Watch: commute D, schools F, crime F.
• Atlantic City School District (urban): math 9% / reading 26% proficiency, ranked #454 of 472 in NJ (top 96%) — 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: flood insurance adds $427/mo; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.5%/yr); 482 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 672 units permitted in Atlantic County in 2024 (258 in 5+ unit buildings).
• Atlantic County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 26y 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 $180k; list at $398k implies a 121% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,311/mo this rent would consume 67% of the median local household income ($41k/yr) (locally 3414% 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 34 days. Have you received any prior offers? Is the seller open to a 56% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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?
• 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?