30 Davis Ave

Salem, NJ 08079

$85,000B

4 bd · None ba · 800 sqft · Built 1920 · SingleFamily · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,172/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$619
• HOA: −$0
• Vac / Maint / Mgmt: −$456
• Net cashflow: $652/mo
• Annual: $7,820/yr
• Cap rate: 21.51%
• Cash-on-cash: 54.36%
• DSCR: 3.42
• 1% rule: 2.56%
• Cash to close: $23,800

Investor read

• This is a 4-bed/?-bath single-family listed at $85k.
• At list price, monthly cash flow is $652 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 26 days — a 2% lower offer ($84k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $84k (1.5% below list) — sets the bar for market timing.
• In year one you build about $265 of equity ($588 loan paydown + $-323 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: flood insurance adds $427/mo; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 100 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 5 sale attempts since 18y 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 $60k; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-0.4% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); 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 21.5% 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 $2,172/mo this rent would consume 48% 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

• Built in 1920 — 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?
• 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.
• 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.