41 Monhagen Ave #39

Middletown, NY 10940

$410,000B-

5 bd · 3.5 ba · 3,890 sqft · Built 1910 · MultiFamily · Pending · 90 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,874/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$1,020
• HOA: −$0
• Vac / Maint / Mgmt: −$1,024
• Net cashflow: $680/mo
• Annual: $8,159/yr
• Cap rate: 8.28%
• Cash-on-cash: 7.11%
• DSCR: 1.32
• 1% rule: 1.19%
• Cash to close: $114,800

Investor read

• This is a 2 × 2-bed/2.0-bath units multifamily listed at $410k.
• At list price, monthly cash flow is $680 ($8k/yr) — positive. Per door: $340/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $410k).
• It's been on market 90 days — a 6% lower offer ($385k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $385k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k 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-, schools D+.
• 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.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 273 active listings in the ZIP; solid renter incomes; 1,746 units permitted in Orange County in 2024 (1,265 in 5+ unit buildings).
• Current owner paid $326k; 26% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $115k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 8.3% 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.
• At $4,874/mo this rent would consume 67% of the median local household income ($87k/yr) (locally 1846% 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 90 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.