219 Arizona Ave

Atlantic City, NJ 08401

$199,000B-

3 bd · 1.0 ba · 1,148 sqft · Built 1900 · Townhouse · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,279/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$676
• HOA: −$0
• Vac / Maint / Mgmt: −$479
• Net cashflow: $81/mo
• Annual: $969/yr
• Cap rate: 9.35%
• Cash-on-cash: 10.93%
• DSCR: 1.49
• 1% rule: 1.15%
• Cash to close: $55,720

Investor read

• This is a 3-bed/1.0-bath townhouse listed at $199k.
• At list price, monthly cash flow is $81 ($969/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $199k).
• It's been on market 25 days — a 2% lower offer ($196k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#525 in NJ) — a working-class tenant base; expect higher turnover. Strengths: health & safety A; Watch: commute D, crime F, amenities F.
• Atlantic City School District (urban): math 9% / reading 26% proficiency, ranked #454 of 472 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 85% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Texas Avenue School (math 10% / reading 26%, grade F, #1,049 of 1,303 statewide, top 81%, 498 students, 96% FRL); Atlantic City High School (math 12% / reading 32%, grade F, #346 of 399 statewide, top 88%, 1,764 students, 80% FRL) — zoned schools at 88% FRL track the district average.
• Watch-outs: flood insurance adds $427/mo; built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.5%/yr); 491 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 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.
• 2 sale attempts since 16y ago; this cycle's ask has dropped $20k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $30k; list at $199k implies a 563% 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 9.4% vs local median 3.7% in Atlantic City — 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 $2,279/mo this rent would consume 67% of the median local household income ($41k/yr) (locally 3414% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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 F 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.
• 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.