1227 Varuna Dr

Forked River, NJ 08731

$984,900B-

4 bd · 4.0 ba · 2,662 sqft · Built 1995 · SingleFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,321/mo
• Mortgage (P&I): −$5,165
• Tax + insurance: −$1,819
• HOA: −$0
• Vac / Maint / Mgmt: −$3,847
• Net cashflow: $7,490/mo
• Annual: $89,879/yr
• Cap rate: 15.94%
• Cash-on-cash: 34.45%
• DSCR: 2.53
• 1% rule: 1.86%
• Cash to close: $275,772

Investor read

• This is a 4-bed/4.0-bath single-family listed at $985k.
• At list price, monthly cash flow is $7k ($90k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $985k).
• It's been on market 54 days — a 3% lower offer ($955k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $955k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#464 in NJ) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A-, employment A-; Watch: amenities F, commute F, cost of living F.
• Lacey Township School District (suburban): math 22% / reading 43% proficiency, ranked #299 of 472 in NJ (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 19% free/reduced lunch — higher-income household profile.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 190 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 4,434 units permitted in Ocean County in 2024 (868 in 5+ unit buildings).
• Ocean County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 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 $450k; list at $985k implies a 119% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $276k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; moderate wildfire risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 15.9% vs local median 3.2% in Forked River — 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

• It's been on market 54 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?
• 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.