26 Orchard St

Summit, NJ 07901-3923

$650,000D

5 bd · 2.0 ba · 2,028 sqft · Built 1900 · SingleFamily · Under Contract · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,948/mo
• Mortgage (P&I): −$3,409
• Tax + insurance: −$837
• HOA: −$0
• Vac / Maint / Mgmt: −$1,039
• Net cashflow: $-337/mo
• Annual: $-4,043/yr
• Cap rate: 5.67%
• Cash-on-cash: -2.22%
• DSCR: 0.90
• 1% rule: 0.76%
• Cash to close: $182,000

Investor read

• This is a 5-bed/2.0-bath single-family listed at $650k.
• At list price, monthly cash flow is $-337 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $590k (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $495k (23.9% below list).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $495k (23.9% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($4k loan paydown + $20k appreciation (3.0% local appreciation)).
• Location reads 84/100 on livability (#26 in NJ, #713 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: cost of living F.
• Summit Public School District (suburban): math 65% / reading 69% proficiency, ranked #24 of 472 in NJ (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Zoned schools: Primary Center At Jefferson (143 students, 18% FRL); Summit High School (math 67% / reading 68%, grade B, #34 of 399 statewide, top 8%, 1,161 students, 14% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,749 units permitted in Union County in 2024 (1,421 in 5+ unit buildings).
• Union County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $355k; list at $650k implies a 83% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$39k 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1900 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.