674 Merchants Rd

Rochester, NY 14609

$244,900D

4 bd · 1.5 ba · 2,360 sqft · Built 1960 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,110/mo
• Mortgage (P&I): −$1,284
• Tax + insurance: −$302
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $81/mo
• Annual: $970/yr
• Cap rate: 6.69%
• Cash-on-cash: 1.41%
• DSCR: 1.06
• 1% rule: 0.86%
• Cash to close: $68,572

Investor read

• This is a 4-bed/1.5-bath single-family listed at $245k.
• At list price, monthly cash flow is $81 ($970/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (13.9% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $211k (13.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#222 in NY, #3,482 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment F.
• Rochester City School District (urban): math 21% / reading 26% proficiency, ranked #589 of 590 in NY (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 82% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Joseph C Wilson Foundation Academy (math 8% / reading 17%, grade F, #2,049 of 2,108 statewide, top 98%, 404 students, 91% FRL); East Lower School (math 2% / reading 22%, grade F, #715 of 729 statewide, top 98%, 304 students, 86% FRL); Edison Career And Technology High School (math 44% / reading 50%, grade D-, #1,007 of 1,100 statewide, top 93%, 1,233 students, 91% FRL).
• Market conditions: Rents rising fast (+7.9%/yr); 199 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); 1,169 units permitted in Monroe County in 2024 (591 in 5+ unit buildings).
• Monroe County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 6.7% vs local median 9.3% in Rochester — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 39% of the median local income ($65k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.