206 W Main St

Middletown, NY 10940

$325,000D

4 bd · 1.0 ba · 1,248 sqft · Built 1900 · SingleFamily · Pending · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,598/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$652
• HOA: −$0
• Vac / Maint / Mgmt: −$546
• Net cashflow: $-303/mo
• Annual: $-3,641/yr
• Cap rate: 5.38%
• Cash-on-cash: -3.27%
• DSCR: 0.85
• 1% rule: 0.80%
• Cash to close: $91,000

Investor read

• This is a 4-bed/1.0-bath single-family listed at $325k.
• At list price, monthly cash flow is $-303 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $271k (16.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $260k (20.1% below list).
• It's been on market 29 days — a 2% lower offer ($320k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $260k (20.1% 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 $10k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#79 in NY, #1,219 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, housing A+, health & safety A+; Watch: commute C-.
• Middletown City School District (suburban): math 41% / reading 55% proficiency, ranked #411 of 590 in NY (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Maple Hill Elementary School (math 32% / reading 38%, grade F, #1,569 of 2,108 statewide, top 75%, 1,012 students, 80% FRL); Monhagen Middle School (math 16% / reading 39%, grade F, #576 of 729 statewide, top 79%, 817 students, 75% FRL); Middletown High School (math 90% / reading 92%, grade A+, #203 of 1,100 statewide, top 20%, 2,523 students, 71% FRL).
• Watch-outs: flood insurance adds $56/mo; built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 279 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,746 units permitted in Orange County in 2024 (1,265 in 5+ unit buildings).
• 3 sale attempts since 24y 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 $145k; list at $325k implies a 124% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 3.3% in Middletown — 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 36% of the median local income ($87k/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?
• Built in 1900 — 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?
• 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?
• 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.