402 2nd Ave

Long Branch, NJ 07740

$2,475,000D

12 bd · 8.8 ba · 5,021 sqft · Built 1902 · MultiFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $20,831/mo
• Mortgage (P&I): −$12,979
• Tax + insurance: −$1,796
• HOA: −$0
• Vac / Maint / Mgmt: −$4,375
• Net cashflow: $1,681/mo
• Annual: $20,173/yr
• Cap rate: 7.11%
• Cash-on-cash: 2.91%
• DSCR: 1.13
• 1% rule: 0.84%
• Cash to close: $693,000

Investor read

• This is a 4 × 3-bed/2.2-bath units multifamily listed at $2.48M.
• At list price, monthly cash flow is $2k ($20k/yr) — positive. Per door: $420/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.08M (15.8% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $2.08M (15.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $74k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#243 in NJ) — a middle-class / working-renter tenant base. Strengths: health & safety A-; Watch: amenities C-, cost of living F.
• Long Branch Public School District (suburban): math 8% / reading 26% proficiency, ranked #445 of 472 in NJ (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Long Branch Middle School (math 9% / reading 29%, grade F, #401 of 431 statewide, top 93%, 1,108 students, 78% FRL); Long Branch High School (math 8% / reading 35%, grade F, #351 of 399 statewide, top 88%, 1,548 students, 70% FRL) — zoned schools at 74% FRL track the district average.
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.9%/yr); 251 active listings in the ZIP; solid renter incomes; 2,840 units permitted in Monmouth County in 2024 (484 in 5+ unit buildings).
• Monmouth County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• Climate carrying-cost: major flood risk; severe wind risk, 80% 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 7.1% vs local median 0.3% in Long Branch — 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 $20,831/mo this rent would consume 313% of the median local household income ($80k/yr) (locally 2347% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1902 — 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.