935 Ocean Ave #225

Ocean City, NJ 08226

$549,000F

1 bd · 1.0 ba · 778 sqft · Built 1977 · Condo · Active · 162 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,159/mo
• Mortgage (P&I): −$2,879
• Tax + insurance: −$986
• HOA: −$43
• Vac / Maint / Mgmt: −$663
• Net cashflow: $-1,413/mo
• Annual: $-16,951/yr
• Cap rate: 4.14%
• Cash-on-cash: -7.70%
• DSCR: 0.66
• 1% rule: 0.58%
• Cash to close: $153,720

Investor read

• This is a 1-bed/1.0-bath condo listed at $549k.
• At list price, monthly cash flow is $-1k ($-17k/yr) — negative.
• To cash-flow at today's rent, offer at most $299k (45.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $316k (42.5% below list).
• It's been on market 162 days — a 12% lower offer ($483k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $299k (45.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k 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.
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 426 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 16 sale attempts since 26y ago; this cycle's ask is 5390% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $470k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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.
• Cap rate 4.1% vs local median 3.4% in Ocean City — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 162 days. Have you received any prior offers? Is the seller open to a 45% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.