116 Mayor Gibson

Newark, NJ 07104-4854

$515,000B-

6 bd · 3.0 ba · — sqft · Built 1897 · MultiFamily · Under Contract · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,803/mo
• Mortgage (P&I): −$2,701
• Tax + insurance: −$858
• HOA: −$0
• Vac / Maint / Mgmt: −$1,429
• Net cashflow: $1,815/mo
• Annual: $21,784/yr
• Cap rate: 10.52%
• Cash-on-cash: 15.11%
• DSCR: 1.67
• 1% rule: 1.32%
• Cash to close: $144,200

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $515k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive. Per door: $605/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $515k).
• It's been on market 160 days — a 12% lower offer ($453k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $453k (12.0% below list) — sets the bar for market timing.
• In year one you build about $19k of equity ($4k loan paydown + $15k appreciation (3.0% local appreciation)).
• Location reads 67/100 on livability (#343 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, amenities A-; Watch: housing D+, crime F, employment D-.
• Newark Public School District (urban): math 9% / reading 26% proficiency, ranked #452 of 472 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Ann Street School (math 13% / reading 34%, grade F, #921 of 1,303 statewide, top 71%, 1,200 students, 78% FRL); East Side High School (math 17% / reading 22%, grade F, #357 of 399 statewide, top 90%, 2,255 students, 77% FRL) — zoned schools at 77% FRL track the district average.
• Watch-outs: built in 1897 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 3,364 units permitted in Essex County in 2024 (2,551 in 5+ unit buildings).
• Essex County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $144k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: 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 10.5% vs local median 3.0% in Newark — 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 160 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 1897 — 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?