606 W Ocean Heights Ave

Somers Point, NJ 08221

$325,000C

4 bd · 2.0 ba · 2,131 sqft · Built 1860 · MultiFamily · Active · 173 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,843/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$542
• HOA: −$0
• Vac / Maint / Mgmt: −$807
• Net cashflow: $790/mo
• Annual: $9,480/yr
• Cap rate: 9.21%
• Cash-on-cash: 10.42%
• DSCR: 1.46
• 1% rule: 1.18%
• Cash to close: $91,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $325k.
• At list price, monthly cash flow is $790 ($9k/yr) — positive. Per door: $395/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $325k).
• It's been on market 173 days — a 12% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $286k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#314 in NJ) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+; Watch: crime C-, cost of living D, schools D-.
• Somers Point School District (suburban): math 9% / reading 33% proficiency, ranked #423 of 472 in NJ (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1860 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 90 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $50k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $175k; list at $325k implies a 86% gain — meaningful room to come down on a strong offer.
• Cap rate 9.2% vs local median 2.8% in Somers Point — 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.

Questions for listing agent

• It's been on market 173 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1860 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.