1 Lyons Pl

Morristown, NJ 07960-5092

$500,000D

2 bd · 1.5 ba · 1,296 sqft · Built 1984 · Condo · Under Contract · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,107/mo
• Mortgage (P&I): −$2,622
• Tax + insurance: −$899
• HOA: −$0
• Vac / Maint / Mgmt: −$863
• Net cashflow: $-276/mo
• Annual: $-3,318/yr
• Cap rate: 5.79%
• Cash-on-cash: -1.80%
• DSCR: 0.92
• 1% rule: 0.82%
• Cash to close: $140,000

Investor read

• This is a 2-bed/1.5-bath condo listed at $500k.
• At list price, monthly cash flow is $-276 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $451k (9.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $411k (17.9% below list).
• It's been on market 32 days — a 3% lower offer ($485k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $411k (17.9% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($3k loan paydown + $15k appreciation (3.0% local appreciation)).
• Location reads 83/100 on livability (#38 in NJ, #927 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Morris School District (suburban): math 23% / reading 52% proficiency, ranked #214 of 472 in NJ (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hillcrest School (314 students, 48% FRL); Frelinghuysen Middle School (math 18% / reading 53%, grade F, #243 of 431 statewide, top 57%, 1,069 students, 37% FRL); Morristown High School (math 23% / reading 58%, grade F, #184 of 399 statewide, top 46%, 1,868 students, 25% FRL).
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 1 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); 2,357 units permitted in Morris County in 2024 (1,496 in 5+ unit buildings).
• Morris County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 9y 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 $343k; 46% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; moderate wind risk, 26% 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 5.8% vs local median 1.2% in Morristown — 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?
• It's been on market 32 days. Have you received any prior offers? Is the seller open to a 18% 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?
• 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 B-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.