5405 Winchester Ave

Ventnor City, NJ 08406

$549,000D+

3 bd · 2.5 ba · 1,590 sqft · Built 1900 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,481/mo
• Mortgage (P&I): −$2,879
• Tax + insurance: −$915
• HOA: −$0
• Vac / Maint / Mgmt: −$1,151
• Net cashflow: $536/mo
• Annual: $6,430/yr
• Cap rate: 7.46%
• Cash-on-cash: 4.18%
• DSCR: 1.19
• 1% rule: 1.00%
• Cash to close: $153,720

Investor read

• This is a 3-bed/2.5-bath single-family listed at $549k.
• At list price, monthly cash flow is $536 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $548k (0.2% below list).
• It's been on market 15 days — a 2% lower offer ($541k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $541k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#202 in NJ) — a middle-class / working-renter tenant base. Strengths: health & safety A+, commute A-, crime B+; Watch: schools C-, amenities F, cost of living F.
• Ventnor City School District (suburban): math 27% / reading 49% proficiency, ranked #266 of 472 in NJ (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+57.3%/yr); 155 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 672 units permitted in Atlantic County in 2024 (258 in 5+ unit buildings).
• Atlantic County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $154k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.5% vs local median 4.1% in Ventnor 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 $5,481/mo this rent would consume 95% of the median local household income ($69k/yr) (locally 329% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1900 — 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.
• 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.