3101 Boardwalk #2002-2

Atlantic City, NJ 08401

$159,000D-

1 bd · 1.5 ba · 872 sqft · Built 1985 · Condo · Under Contract · 146 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,390/mo
• Mortgage (P&I): −$834
• Tax + insurance: −$265
• HOA: −$908
• Vac / Maint / Mgmt: −$502
• Net cashflow: $-119/mo
• Annual: $-1,423/yr
• Cap rate: 5.40%
• Cash-on-cash: -3.20%
• DSCR: 0.86
• 1% rule: 1.50%
• Cash to close: $44,520

Investor read

• This is a 1-bed/1.5-bath condo listed at $159k.
• At list price, monthly cash flow is $-119 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $142k (10.8% below list).
• Meets the 1% rule at list price ($2k rent vs $159k).
• It's been on market 146 days — a 12% lower offer ($140k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $140k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#525 in NJ) — a working-class tenant base; expect higher turnover. Strengths: health & safety A; Watch: commute D, schools F, crime F.
• Atlantic City School District (urban): math 9% / reading 26% proficiency, ranked #454 of 472 in NJ (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 85% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: HOA is 38% of rent.
• Market conditions: Rents rising fast (+5.5%/yr); 491 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 672 units permitted in Atlantic County in 2024 (258 in 5+ unit buildings).
• Atlantic County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 5.4% vs local median 3.7% in Atlantic City — 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 $2,390/mo this rent would consume 70% of the median local household income ($41k/yr) (locally 3414% 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 146 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 F-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?