46 Walnut St

Salem, NJ 08079

$105,000B

5 bd · 2.5 ba · 2,596 sqft · Built 1890 · SingleFamily · Active · 338 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,262/mo
• Mortgage (P&I): −$551
• Tax + insurance: −$438
• HOA: −$0
• Vac / Maint / Mgmt: −$475
• Net cashflow: $798/mo
• Annual: $9,573/yr
• Cap rate: 15.41%
• Cash-on-cash: 32.56%
• DSCR: 2.45
• 1% rule: 2.15%
• Cash to close: $29,400

Investor read

• This is a 5-bed/2.5-bath single-family listed at $105k.
• At list price, monthly cash flow is $798 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $105k).
• It's been on market 338 days — a 12% lower offer ($92k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $92k (12.0% below list) — sets the bar for market timing.
• In year one you build about $327 of equity ($726 loan paydown + $-399 appreciation (-0.4% local appreciation)).
• Location reads 61/100 on livability (#462 in NJ) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, crime B; Watch: schools D, amenities F, commute F.
• Salem City School District (town): math 6% / reading 24% proficiency, ranked #464 of 472 in NJ (top 98%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 85% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 4.5% of price; built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 100 active listings in the ZIP; 95 units permitted in Salem County in 2024 (0 in 5+ unit buildings).
• Salem County population projected at -23% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 12 sale attempts since 14y ago; this cycle's ask has dropped $65k (38%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-0.4% appreciation + 3.0% rent growth), your $29k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 15.4% vs local median 8.4% in Salem — 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 $2,262/mo this rent would consume 50% of the median local household income ($55k/yr) (locally 663% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 338 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1890 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.