337 N 2nd St

Allentown, PA 18102

$229,900D+

4 bd · 1.0 ba · 1,660 sqft · Built 1875 · Townhouse · Active · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,997/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$238
• HOA: −$0
• Vac / Maint / Mgmt: −$419
• Net cashflow: $134/mo
• Annual: $1,612/yr
• Cap rate: 6.99%
• Cash-on-cash: 2.50%
• DSCR: 1.11
• 1% rule: 0.87%
• Cash to close: $64,372

Investor read

• This is a 4-bed/1.0-bath townhouse listed at $230k.
• At list price, monthly cash flow is $134 ($2k/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 $200k (13.1% below list).
• It's been on market 18 days — a 2% lower offer ($226k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (13.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#171 in PA, #1,440 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D.
• Allentown City SD (urban): math 10% / reading 20% proficiency, ranked #513 of 539 in PA (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Sheridan El Sch (math 2%, 560 students, 100% FRL); Harrison-Morton Ms (math 3% / reading 30%, grade F, #463 of 512 statewide, top 91%, 733 students, 100% FRL); Louis E Dieruff Hs (math 32% / reading 10%, grade F, #385 of 437 statewide, top 88%, 1,915 students, 89% FRL) — zoned schools average 96% FRL vs 73% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1875 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.5%/yr); 170 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 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 7y 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 $118k; list at $230k implies a 94% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood 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 7.0% vs local median 5.3% in Allentown — 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 $1,997/mo this rent would consume 56% of the median local household income ($43k/yr) (locally 4313% 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 1875 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.