836-838 E 2Nd St

Plainfield, NJ 07062-1004

$724,900B-

8 bd · 4.0 ba · — sqft · Built 1921 · MultiFamily · Under Contract · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,469/mo
• Mortgage (P&I): −$3,801
• Tax + insurance: −$1,208
• HOA: −$0
• Vac / Maint / Mgmt: −$1,988
• Net cashflow: $2,471/mo
• Annual: $29,651/yr
• Cap rate: 10.38%
• Cash-on-cash: 14.61%
• DSCR: 1.65
• 1% rule: 1.31%
• Cash to close: $202,972

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $725k.
• At list price, monthly cash flow is $2k ($30k/yr) — positive. Per door: $618/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $725k).
• It's been on market 25 days — a 2% lower offer ($714k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $714k (1.5% below list) — sets the bar for market timing.
• In year one you build about $27k of equity ($5k loan paydown + $22k appreciation (3.0% local appreciation)).
• Location reads 65/100 on livability (#384 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A-; Watch: crime D+, amenities F, cost of living F.
• Plainfield Public School District (suburban): math 17% / reading 25% proficiency, ranked #588 of 612 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Dewitt D. Barlow Elementary School (417 students, 88% FRL); Maxson Middle School (818 students, 84% FRL); Plainfield High School (1,925 students, 78% FRL).
• Watch-outs: built in 1921 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 1,749 units permitted in Union County in 2024 (1,421 in 5+ unit buildings).
• Union County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 11y 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 $185k; list at $725k implies a 292% gain — meaningful room to come down on a strong offer.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $203k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$44k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 10.4% vs local median 3.3% in Plainfield — 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

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1921 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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 D 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?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.