56-58 Hamilton St

Somerville, NJ 08876-2926

$525,000D

4 bd · 2.0 ba · 1,560 sqft · Built 1900 · SingleFamily · Under Contract · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,881/mo
• Mortgage (P&I): −$2,753
• Tax + insurance: −$853
• HOA: −$0
• Vac / Maint / Mgmt: −$815
• Net cashflow: $-540/mo
• Annual: $-6,478/yr
• Cap rate: 5.06%
• Cash-on-cash: -4.41%
• DSCR: 0.80
• 1% rule: 0.74%
• Cash to close: $147,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $525k.
• At list price, monthly cash flow is $-540 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $430k (18.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $388k (26.1% below list).
• It's been on market 102 days — a 9% lower offer ($478k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $388k (26.1% below list) — sets the bar for 1% rule.
• In year one you build about $19k of equity ($4k loan paydown + $16k appreciation (3.0% local appreciation)).
• Location reads 84/100 on livability (#31 in NJ, #782 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: commute C-, cost of living F.
• Somerville Public School District (suburban): math 19% / reading 49% proficiency, ranked #283 of 472 in NJ (top 60%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Van Derveer Elementary School (math 14% / reading 45%, grade F, #731 of 1,303 statewide, top 59%, 717 students, 40% FRL); Somerville Middle School (math 13% / reading 46%, grade F, #316 of 431 statewide, top 74%, 341 students, 40% FRL); Somerville High School (math 27% / reading 56%, grade F, #177 of 399 statewide, top 45%, 1,109 students, 16% FRL) — zoned schools at 32% FRL track the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 678 units permitted in Somerset County in 2024 (296 in 5+ unit buildings).
• Somerset County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts; this cycle's ask has dropped $50k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $100k; list at $525k implies a 425% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$32k 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.

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 102 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.