611 E Federal St

Allentown, PA 18103

$265,000D

3 bd · 1.5 ba · 1,236 sqft · Built 1965 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,957/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$511
• HOA: −$0
• Vac / Maint / Mgmt: −$411
• Net cashflow: $-354/mo
• Annual: $-4,250/yr
• Cap rate: 4.69%
• Cash-on-cash: -5.73%
• DSCR: 0.75
• 1% rule: 0.74%
• Cash to close: $74,200

Investor read

• This is a 3-bed/1.5-bath single-family listed at $265k.
• At list price, monthly cash flow is $-354 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $202k (23.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $196k (26.1% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $196k (26.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#171 in PA, #1,440 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D+, employment D.
• Salisbury Township SD (suburban): math 29% / reading 51% proficiency, ranked #307 of 539 in PA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+7.0%/yr); 161 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 765 units permitted in Lehigh County in 2024 (286 in 5+ unit buildings).
• Lehigh County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 32% of the median local income ($73k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 1965 — 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?
• 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.
• 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.