38 N IOWA Ave

Atlantic City, NJ 08401

$599,990F

6 bd · 3.0 ba · 2,278 sqft · Built 1910 · SingleFamily · Active · 126 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,721/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$1,270
• HOA: −$0
• Vac / Maint / Mgmt: −$571
• Net cashflow: $-2,266/mo
• Annual: $-27,198/yr
• Cap rate: 2.61%
• Cash-on-cash: -13.14%
• DSCR: 0.42
• 1% rule: 0.45%
• Cash to close: $167,997

Investor read

• This is a 6-bed/3.0-bath single-family listed at $600k.
• At list price, monthly cash flow is $-2k ($-27k/yr) — negative.
• To cash-flow at today's rent, offer at most $200k (66.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $272k (54.6% below list).
• It's been on market 126 days — a 12% lower offer ($528k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (66.7% below list) — sets the bar for cash-flow.
• 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 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 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.5%/yr); 482 active listings in the ZIP; 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.
• 8 sale attempts since 19y 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 $205k; list at $600k implies a 193% 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 2.6% vs local median 3.7% in Atlantic City — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $2,721/mo this rent would consume 79% 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 126 days. Have you received any prior offers? Is the seller open to a 67% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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 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?