89 Chestnut St

Salem, NJ 08079

$89,000B+

3 bd · 1.0 ba · 1,214 sqft · Built 1939 · SingleFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,593/mo
• Mortgage (P&I): −$467
• Tax + insurance: −$287
• HOA: −$0
• Vac / Maint / Mgmt: −$334
• Net cashflow: $505/mo
• Annual: $6,054/yr
• Cap rate: 13.99%
• Cash-on-cash: 27.50%
• DSCR: 2.22
• 1% rule: 1.79%
• Cash to close: $24,920

Investor read

• This is a 3-bed/1.0-bath single-family listed at $89k.
• At list price, monthly cash flow is $505 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $89k).
• It's been on market 55 days — a 3% lower offer ($86k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $86k (3.0% below list) — sets the bar for market timing.
• In year one you build about $277 of equity ($615 loan paydown + $-338 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: amenities F, commute F, employment 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.
• Zoned schools: Salem High School (math 17% / reading 37%, grade F, #312 of 399 statewide, top 79%, 420 students, 52% FRL) — zoned schools average 52% FRL vs 85% district-wide (33 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 27% at this address vs 15% district-wide (+12 pts) — the actual schools serving this property are materially stronger than the Salem City School District average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: flood insurance adds $66/mo; built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 100 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 2 sale attempts since 27y 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 $21k; list at $89k implies a 324% gain — meaningful room to come down on a strong offer.
• At projected returns (-0.4% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: severe 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.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1939 — 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.