218 Orchard St

Elizabeth, NJ 07208-1649

$729,900D

8 bd · 4.0 ba · 19,998 sqft · Built — · MultiFamily · Under Contract · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,027/mo
• Mortgage (P&I): −$3,828
• Tax + insurance: −$1,216
• HOA: −$0
• Vac / Maint / Mgmt: −$1,266
• Net cashflow: $-283/mo
• Annual: $-3,394/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.66%
• DSCR: 0.93
• 1% rule: 0.83%
• Cash to close: $204,372

Investor read

• This is a 2 × 4-bed/2.0-bath units multifamily listed at $730k. Condition is rated fair.
• At list price, monthly cash flow is $-283 ($-3k/yr) — negative. Per door: $-141/mo.
• To cash-flow at today's rent, offer at most $689k (5.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $603k (17.4% below list).
• It's been on market 26 days — a 2% lower offer ($719k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $603k (17.4% below list) — sets the bar for 1% rule.
• In year one you build about $27k of equity ($5k loan paydown + $22k appreciation (3.0% local appreciation)).
• Location reads 69/100 on livability (#277 in NJ) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety B+; Watch: amenities D+, schools D-, crime D-.
• Elizabeth Public Schools (suburban): math 9% / reading 33% proficiency, ranked #430 of 472 in NJ (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 74% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 1 active listings in the ZIP; 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.
• 2 sale attempts since 9y ago 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.
• Current owner paid $271k; list at $730k implies a 169% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$44k 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 5.8% vs local median 2.4% in Elizabeth — 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

• 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?
• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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 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?

Repairs flagged (vision-AI assessment)

• Moderate: siding — Weathered and discolored
• Moderate: exterior paint — Needs touch-up