2388 Zeder Ave

Delray Beach, FL 33444

$720,000D

3 bd · 2.0 ba · 2,180 sqft · Built 1980 · SingleFamily · Active · 106 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,436/mo
• Mortgage (P&I): −$3,776
• Tax + insurance: −$553
• HOA: −$0
• Vac / Maint / Mgmt: −$1,142
• Net cashflow: $-34/mo
• Annual: $-410/yr
• Cap rate: 6.24%
• Cash-on-cash: -0.20%
• DSCR: 0.99
• 1% rule: 0.75%
• Cash to close: $201,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $720k.
• At list price, monthly cash flow is $-34 ($-410/yr) — negative.
• To cash-flow at today's rent, offer at most $714k (0.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $544k (24.5% below list).
• It's been on market 106 days — a 9% lower offer ($655k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $544k (24.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $22k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#202 in FL, #3,160 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, commute A-; Watch: cost of living C-, crime D-, amenities F.
• Palm Beach (suburban): math 46% / reading 53% proficiency, ranked #34 of 73 in FL (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pine Grove Elementary School (math 42% / reading 47%, grade F, #1,288 of 2,144 statewide, top 62%, 354 students, 79% FRL); Atlantic High School (math 28% / reading 52%, grade F, #296 of 667 statewide, top 45%, 1,889 students, 59% FRL) — zoned schools average 69% FRL vs 52% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+1.6%/yr); 233 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 3,974 units permitted in Palm Beach County in 2024 (1,012 in 5+ unit buildings).
• Palm Beach County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 15y ago; this cycle's ask has dropped $75k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $117k; list at $720k implies a 515% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→26/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 4.3% in Delray Beach — 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 $5,436/mo this rent would consume 89% of the median local household income ($73k/yr) (locally 1211% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• It's been on market 106 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• 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 B-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?
• Crime grade is D 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?
• 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.