404-06 E Farragut Rd #7

Wildwood Crest, NJ 08260

$469,000D+

2 bd · 1.0 ba · 588 sqft · Built 1959 · Condo · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,563/mo
• Mortgage (P&I): −$2,459
• Tax + insurance: −$1,208
• HOA: −$0
• Vac / Maint / Mgmt: −$958
• Net cashflow: $-63/mo
• Annual: $-755/yr
• Cap rate: 7.22%
• Cash-on-cash: 3.32%
• DSCR: 1.15
• 1% rule: 0.97%
• Cash to close: $131,320

Investor read

• This is a 2-bed/1.0-bath condo listed at $469k. Condition is rated good.
• At list price, monthly cash flow is $-63 ($-755/yr) — negative.
• To cash-flow at today's rent, offer at most $460k (1.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $456k (2.7% below list).
• It's been on market 33 days — a 3% lower offer ($455k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $455k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#257 in NJ) — a middle-class / working-renter tenant base. Strengths: health & safety A+; Watch: amenities C-, commute F, cost of living F.
• Wildwood Crest Borough School District (suburban): math 35% / reading 45% proficiency, ranked #493 of 612 in NJ (top 81%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 436 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 877 units permitted in Cape May County in 2024 (35 in 5+ unit buildings).
• Cape May County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 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→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.2% vs local median 2.7% in Wildwood Crest — 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 33 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1959 — 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?
• 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.
• 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.