56861 Private Rd B (main)

Southold, NY 11971

$1,499,000C+

6 bd · 3.0 ba · 2,911 sqft · Built 1985 · SingleFamily · Active · 159 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $50,000/mo
• Mortgage (P&I): −$7,861
• Tax + insurance: −$1,661
• HOA: −$0
• Vac / Maint / Mgmt: −$10,500
• Net cashflow: $29,978/mo
• Annual: $359,731/yr
• Cap rate: 30.29%
• Cash-on-cash: 85.71%
• DSCR: 4.81
• 1% rule: 3.34%
• Cash to close: $419,720

Investor read

• This is a 6-bed/3.0-bath single-family listed at $1.50M.
• At list price, monthly cash flow is $30k ($360k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($50k rent vs $1.50M).
• It's been on market 159 days — a 12% lower offer ($1.32M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.32M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#583 in NY) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, health & safety B+; Watch: amenities F, commute F, cost of living F.
• Southold Union Free School District (town): math 46% / reading 59% proficiency, ranked #298 of 590 in NY (top 50%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: Southold Elementary School (math 37% / reading 62%, grade D, #1,085 of 2,108 statewide, top 56%, 317 students, 35% FRL); Southold Junior-Senior High School (math 52% / reading 52%, grade D+, #946 of 1,100 statewide, top 88%, 380 students, 40% FRL) — zoned schools average 38% FRL vs 17% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 79 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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 4y ago; this cycle's ask has dropped $251k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $1.10M; 36% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $420k cash investment doubles in ~2 years — after that, you're playing with house money.
• 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 30.3% vs local median 6.9% in Southold — 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

• It's been on market 159 days. Have you received any prior offers? Is the seller open to a 12% 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.
• Schools are A-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?
• 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.