16 Railroad Pl

Pennington, NJ 08534

$232,500D

2 bd · 2.0 ba · 1,650 sqft · Built 1988 · Condo · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,660/mo
• Mortgage (P&I): −$1,219
• Tax + insurance: −$710
• HOA: −$255
• Vac / Maint / Mgmt: −$559
• Net cashflow: $-83/mo
• Annual: $-993/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.52%
• DSCR: 0.93
• 1% rule: 1.14%
• Cash to close: $65,100

Investor read

• This is a 2-bed/2.0-bath condo listed at $232k.
• At list price, monthly cash flow is $-83 ($-993/yr) — negative.
• To cash-flow at today's rent, offer at most $218k (6.3% below list).
• Meets the 1% rule at list price ($3k rent vs $232k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $218k (6.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#84 in NJ, #2,077 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, employment A+; Watch: amenities F, cost of living F.
• Hopewell Valley Regional School District (suburban): math 39% / reading 66% proficiency, ranked #72 of 472 in NJ (top 15%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 2% free/reduced lunch — higher-income household profile.
• Zoned schools: Toll Gate Grammar School (math 42% / reading 57%, grade D, #256 of 1,303 statewide, top 22%, 310 students, 2% FRL); Timberlane Middle School (math 40% / reading 69%, grade B-, #68 of 431 statewide, top 16%, 780 students, 3% FRL); Hopewell Valley Central High School (math 44% / reading 71%, grade C, #67 of 399 statewide, top 17%, 1,079 students, 5% FRL) — zoned schools at 3% FRL track the district average.
• Watch-outs: property tax is 3.2% of price.
• Market conditions: Rents soft (-2.2%/yr); 141 active listings in the ZIP; high-income renter base; 2,256 units permitted in Mercer County in 2024 (1,303 in 5+ unit buildings).
• Mercer County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 7 sale attempts since 7y ago; this cycle's ask has dropped $152k (40%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% vs local median 2.7% in Pennington — 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

• 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?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• 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.