603 A Wesley Ave #A

Ocean City, NJ 08226

$1,099,000F

5 bd · 2.0 ba · 2,153 sqft · Built — · Condo · Active · 86 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,400/mo
• Mortgage (P&I): −$5,763
• Tax + insurance: −$2,258
• HOA: −$0
• Vac / Maint / Mgmt: −$1,134
• Net cashflow: $-3,755/mo
• Annual: $-45,066/yr
• Cap rate: 2.66%
• Cash-on-cash: -12.98%
• DSCR: 0.42
• 1% rule: 0.49%
• Cash to close: $307,720

Investor read

• This is a 5-bed/2.0-bath condo listed at $1.10M. Condition is rated good.
• At list price, monthly cash flow is $-4k ($-45k/yr) — negative.
• To cash-flow at today's rent, offer at most $556k (49.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $540k (50.9% below list).
• It's been on market 86 days — a 6% lower offer ($1.03M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $540k (50.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $33k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in NJ, #1,762 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, employment A+, health & safety A+; Watch: housing D+, cost of living F.
• Ocean City School District (urban): math 31% / reading 53% proficiency, ranked #212 of 472 in NJ (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ocean City Primary School (math 54% / reading 42%, grade D, #299 of 1,303 statewide, top 23%, 280 students, 31% FRL); Ocean City Intermediate School (math 26% / reading 49%, grade F, #217 of 431 statewide, top 51%, 370 students, 27% FRL); Ocean City High School (math 33% / reading 63%, grade D, #117 of 399 statewide, top 30%, 1,215 students, 13% FRL) — zoned schools at 24% FRL track the district average.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 725 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 877 units permitted in Cape May County in 2024 (35 in 5+ unit buildings).
• Cape May County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 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: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $5,400/mo this rent would consume 64% of the median local household income ($102k/yr) — 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 86 days. Have you received any prior offers? Is the seller open to a 51% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 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?