28 Bailey Ct #28

Middle Island, NY 11953

$179,000D

1 bd · 1.0 ba · 700 sqft · Built 1975 · Condo · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,444/mo
• Mortgage (P&I): −$939
• Tax + insurance: −$298
• HOA: −$870
• Vac / Maint / Mgmt: −$513
• Net cashflow: $-176/mo
• Annual: $-2,114/yr
• Cap rate: 5.11%
• Cash-on-cash: -4.22%
• DSCR: 0.81
• 1% rule: 1.37%
• Cash to close: $50,120

Investor read

• This is a 1-bed/1.0-bath condo listed at $179k.
• At list price, monthly cash flow is $-176 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $154k (14.2% below list).
• Meets the 1% rule at list price ($2k rent vs $179k).
• It's been on market 49 days — a 3% lower offer ($174k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (14.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#703 in NY) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: crime C-, amenities F, commute F.
• Longwood Central School District (rural): math 61% / reading 55% proficiency, ranked #235 of 590 in NY (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Ridge Elementary School (math 42% / reading 57%, grade D, #1,085 of 2,108 statewide, top 56%, 719 students, 44% FRL); Longwood Junior High School (math 67% / reading 67%, grade A-, #101 of 729 statewide, top 15%, 1,388 students, 48% FRL); Longwood High School (math 90% / reading 77%, grade A, #409 of 1,100 statewide, top 39%, 2,977 students, 44% FRL).
• Watch-outs: HOA is 36% of rent.
• Market conditions: 125 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,366 units permitted in Suffolk County in 2024 (216 in 5+ unit buildings).
• Suffolk County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 13y 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 $150k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 3.3% in Middle Island — 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.

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 49 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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?