842 Chestnut St

Emmaus, PA 18049

$194,900C+

3 bd · 1.0 ba · 1,558 sqft · Built 1912 · Townhouse · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,214/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$446
• HOA: −$0
• Vac / Maint / Mgmt: −$465
• Net cashflow: $281/mo
• Annual: $3,367/yr
• Cap rate: 8.02%
• Cash-on-cash: 6.17%
• DSCR: 1.27
• 1% rule: 1.14%
• Cash to close: $54,572

Investor read

• This is a 3-bed/1.0-bath townhouse listed at $195k.
• At list price, monthly cash flow is $281 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 19 days — a 2% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $192k (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 86/100 on livability (#61 in PA, #424 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, cost of living A+; Watch: commute F.
• East Penn SD (suburban): math 43% / reading 65% proficiency, ranked #103 of 539 in PA (top 19%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1912 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.2%/yr); 98 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 3 sale attempts since 25y ago; this cycle's ask has dropped $14k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $80k; list at $195k implies a 144% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 6.2% rent growth), your $55k cash investment doubles in ~10 years — after that, you're playing with house money.
• 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.
• Cap rate 8.0% vs local median 3.3% in Emmaus — 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

• Built in 1912 — 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 A-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?
• 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.