503 Second Ave

Pelham, NY 10803

$850,000D

3 bd · 2.5 ba · 1,862 sqft · Built 1890 · MultiFamily · Pending · 123 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,624/mo
• Mortgage (P&I): −$4,457
• Tax + insurance: −$1,872
• HOA: −$0
• Vac / Maint / Mgmt: −$1,391
• Net cashflow: $-1,097/mo
• Annual: $-13,164/yr
• Cap rate: 4.74%
• Cash-on-cash: -5.53%
• DSCR: 0.75
• 1% rule: 0.78%
• Cash to close: $238,000

Investor read

• This is a 2 × 3-bed/3.0-bath units multifamily listed at $850k.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative. Per door: $-548/mo.
• To cash-flow at today's rent, offer at most $656k (22.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $662k (22.1% below list).
• It's been on market 123 days — a 12% lower offer ($748k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $656k (22.8% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#27 in NY, #480 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, amenities A+; Watch: cost of living F.
• Pelham Union Free School District (suburban): math 80% / reading 81% proficiency, ranked #29 of 590 in NY (top 5%) — strong family-tenant draw, lease renewals of 3-5y typical; only 5% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 80 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 954 units permitted in Westchester County in 2024 (649 in 5+ unit buildings).
• Westchester County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 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 4.7% vs local median 0.5% in Pelham — 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.
• This rent runs 37% of the median local income ($215k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 123 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1890 — 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.
• 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?