87 Locust St

Lockport, NY 14094

$40,000D+

3 bd · 3.0 ba · 2,208 sqft · Built 1880 · MultiFamily · Pending · 129 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,739/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$120
• HOA: −$0
• Vac / Maint / Mgmt: −$785
• Net cashflow: $2,625/mo
• Annual: $31,494/yr
• Cap rate: 85.03%
• Cash-on-cash: 281.20%
• DSCR: 13.51
• 1% rule: 9.35%
• Cash to close: $11,200

Investor read

• This is a 3-bed/3.0-bath multifamily listed at $40k.
• At list price, monthly cash flow is $3k ($31k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $40k).
• It's been on market 129 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $277 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#232 in NY, #3,669 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute D+, crime F, employment D-.
• Lockport City School District (town): math 44% / reading 49% proficiency, ranked #452 of 590 in NY (top 77%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.1% of price; built in 1880 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.7%/yr); 357 active listings in the ZIP; solid renter incomes; 167 units permitted in Niagara County in 2024 (0 in 5+ unit buildings).
• Niagara County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 4y ago; this cycle's ask has dropped $10k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $33k; 21% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.7% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 85.0% vs local median 4.5% in Lockport — 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.
• At $3,739/mo this rent would consume 59% of the median local household income ($75k/yr) (locally 1112% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 129 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1880 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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?
• 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?