512 Edge of Woods Rd

Water Mill, NY 11976

$6,995,000D+

3 bd · 2.0 ba · 1,256 sqft · Built 2026 · SingleFamily · Pending · 146 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $44,726/mo
• Mortgage (P&I): −$36,683
• Tax + insurance: −$11,658
• HOA: −$0
• Vac / Maint / Mgmt: −$9,392
• Net cashflow: $-13,007/mo
• Annual: $-156,087/yr
• Cap rate: 4.06%
• Cash-on-cash: -7.97%
• DSCR: 0.65
• 1% rule: 0.64%
• Cash to close: $1,958,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $7.00M.
• At list price, monthly cash flow is $-13k ($-156k/yr) — negative.
• To cash-flow at today's rent, offer at most $5.11M (26.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $4.47M (36.1% below list).
• It's been on market 146 days — a 12% lower offer ($6.16M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.47M (36.1% below list) — sets the bar for 1% rule.
• In year one you build about $652k of equity ($48k loan paydown + $604k appreciation (8.6% local appreciation)).
• Location reads 71/100 on livability (#410 in NY) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, commute A-; Watch: amenities F, cost of living F, housing F.
• Southampton Union Free School District (suburban): math 53% / reading 51% proficiency, ranked #293 of 590 in NY (top 50%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+30.1%/yr); 52 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 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.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $500k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $1.86M; list at $7.00M implies a 276% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$1.05M cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.1% vs local median 10.6% in Water Mill — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $44,726/mo this rent would consume 298% of the median local household income ($180k/yr) — very limited rent-growth headroom before tenants either downsize or default.

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 146 days. Have you received any prior offers? Is the seller open to a 36% concession, seller financing, or rate buy-down credit?
• 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.
• 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.