Ocean High CM Wk40 32nd Street Extended

Ocean City, MD 21842

$10,000D

3 bd · 2.0 ba · 1,400 sqft · Built 1982 · Condo · Active · 241 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,570/mo
• Mortgage (P&I): −$52
• Tax + insurance: −$17
• HOA: −$125
• Vac / Maint / Mgmt: −$540
• Net cashflow: $1,836/mo
• Annual: $22,035/yr
• Cap rate: 226.65%
• Cash-on-cash: 786.97%
• DSCR: 36.02
• 1% rule: 25.70%
• Cash to close: $2,800

Investor read

• This is a 3-bed/2.0-bath condo listed at $10k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $10k).
• It's been on market 241 days — a 12% lower offer ($9k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $9k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $69 of loan paydown is wiped out by about $300 of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#125 in MD) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety A+, amenities B; Watch: cost of living C-, crime F.
• Worcester County Public Schools (town): math 30% / reading 44% proficiency, ranked #6 of 24 in MD (top 25%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ocean City Elementary (math 37% / reading 47%, grade F, #84 of 860 statewide, top 10%, 521 students, 44% FRL); Stephen Decatur Middle (math 24% / reading 43%, grade F, #53 of 225 statewide, top 24%, 697 students, 50% FRL); Stephen Decatur High (math 64% / reading 78%, grade B+, #37 of 222 statewide, top 17%, 1,431 students, 42% FRL).
• Market conditions: 677 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 354 units permitted in Worcester County in 2024 (6 in 5+ unit buildings).
• Worcester County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 20y ago; this cycle's ask has dropped $10k (50%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $2k; list at $10k implies a 513% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $3k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 226.6% vs local median 1.4% 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.
• This rent runs 39% of the median local income ($80k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 241 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-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?
• 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?