4 Shadow Lake Dr

Fairview, NJ 07701

$525,000C-

4 bd · 1.5 ba · 1,332 sqft · Built 1948 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,717/mo
• Mortgage (P&I): −$2,753
• Tax + insurance: −$1,013
• HOA: −$0
• Vac / Maint / Mgmt: −$991
• Net cashflow: $-40/mo
• Annual: $-476/yr
• Cap rate: 6.20%
• Cash-on-cash: -0.32%
• DSCR: 0.99
• 1% rule: 0.90%
• Cash to close: $147,000

Investor read

• This is a 4-bed/1.5-bath single-family listed at $525k.
• At list price, monthly cash flow is $-40 ($-476/yr) — negative.
• To cash-flow at today's rent, offer at most $518k (1.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $472k (10.2% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $472k (10.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#174 in NJ, #4,548 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: commute C-, schools D-, cost of living F.
• Middletown Township Public School District (suburban): math 39% / reading 55% proficiency, ranked #135 of 472 in NJ (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 9% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.5%/yr); 141 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,840 units permitted in Monmouth County in 2024 (484 in 5+ unit buildings).
• Monmouth County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Climate carrying-cost: 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 6.2% vs local median 2.6% in Fairview — 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.
• At $4,717/mo this rent would consume 50% of the median local household income ($112k/yr) (locally 854% 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?
• Built in 1948 — 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.