119 N Madison #B Ave #B

Margate City, NJ 08402

$2,650,000F

5 bd · 5.5 ba · 3,500 sqft · Built 2026 · Land · Active · 141 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $14,246/mo
• Mortgage (P&I): −$13,897
• Tax + insurance: −$2,014
• HOA: −$0
• Vac / Maint / Mgmt: −$2,992
• Net cashflow: $-4,657/mo
• Annual: $-55,887/yr
• Cap rate: 4.38%
• Cash-on-cash: -6.84%
• DSCR: 0.70
• 1% rule: 0.54%
• Cash to close: $742,000

Investor read

• This is a 5-bed/5.5-bath land listed at $2.65M.
• At list price, monthly cash flow is $-5k ($-56k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.83M (31.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.42M (46.2% below list).
• It's been on market 141 days — a 12% lower offer ($2.33M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.42M (46.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $18k of loan paydown is wiped out by about $80k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#149 in NJ, #3,893 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F, cost of living F.
• Margate City School District (suburban): math 50% / reading 58% proficiency, ranked #113 of 472 in NJ (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: Rents rising fast (+8.9%/yr); 147 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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.
• 3 sale attempts since 2y 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 $1.45M; list at $2.65M implies a 83% 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 4.4% vs local median 7.4% in Margate City — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $14,246/mo this rent would consume 140% of the median local household income ($122k/yr) (locally 23% 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 141 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• 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?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.