811 E 7th St Ave

Ocean City, NJ 08226

$1,250,000D

5 bd · 3.5 ba · 2,384 sqft · Built 1925 · SingleFamily · Under Contract · 236 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,524/mo
• Mortgage (P&I): −$6,555
• Tax + insurance: −$1,905
• HOA: −$0
• Vac / Maint / Mgmt: −$2,000
• Net cashflow: $-937/mo
• Annual: $-11,238/yr
• Cap rate: 5.80%
• Cash-on-cash: -1.75%
• DSCR: 0.92
• 1% rule: 0.76%
• Cash to close: $350,000

Investor read

• This is a 5-bed/3.5-bath single-family listed at $1.25M.
• At list price, monthly cash flow is $-937 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.08M (13.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $952k (23.8% below list).
• It's been on market 236 days — a 12% lower offer ($1.10M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $952k (23.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $38k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in NJ, #1,762 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, employment A+, health & safety A+; Watch: housing D+, cost of living F.
• Ocean City School District (urban): math 31% / reading 53% proficiency, ranked #212 of 472 in NJ (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 419 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 877 units permitted in Cape May County in 2024 (35 in 5+ unit buildings).
• Cape May County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $180k; list at $1.25M implies a 594% 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.
• Cap rate 5.8% vs local median 3.3% in Ocean City — 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.

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 236 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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?
• 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 A-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?