278 MAGNOLIA Ave #12

Jersey City, NJ 07306

$399,999F

2 bd · 1.0 ba · 865 sqft · Built 1987 · Condo · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,268/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$743
• HOA: −$660
• Vac / Maint / Mgmt: −$686
• Net cashflow: $-918/mo
• Annual: $-11,020/yr
• Cap rate: 3.54%
• Cash-on-cash: -9.84%
• DSCR: 0.56
• 1% rule: 0.82%
• Cash to close: $112,000

Investor read

• This is a 2-bed/1.0-bath condo listed at $400k. Condition is rated good.
• At list price, monthly cash flow is $-918 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $238k (40.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $327k (18.3% below list).
• It's been on market 16 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $238k (40.6% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#116 in NJ, #2,955 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• Jersey City Public Schools (urban): math 16% / reading 38% proficiency, ranked #369 of 472 in NJ (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mahatma K. Gandhi School (math 13% / reading 31%, grade F, #951 of 1,303 statewide, top 75%, 1,001 students, 54% FRL); Academy I (math 60% / reading 76%, grade A-, #14 of 431 statewide, top 3%, 403 students, 46% FRL); William L Dickinson High School (math 11% / reading 35%, grade F, #337 of 399 statewide, top 85%, 2,024 students, 59% FRL) — zoned schools average 53% FRL vs 69% district-wide (16 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: HOA is 20% of rent.
• Market conditions: Rents rising (+2.6%/yr); 306 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 53d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; 5,310 units permitted in Hudson County in 2024 (4,154 in 5+ unit buildings).
• Hudson County population projected at +29% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts 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.
• Cap rate 3.5% vs local median 2.1% in Jersey 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 $3,268/mo this rent would consume 52% of the median local household income ($75k/yr) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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 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?
• 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?
• 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.