11 Bay Ave

East Patchogue, NY 11772

$730,000B-

5 bd · 3.0 ba · 1,854 sqft · Built 1900 · MultiFamily · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,874/mo
• Mortgage (P&I): −$3,828
• Tax + insurance: −$852
• HOA: −$0
• Vac / Maint / Mgmt: −$1,654
• Net cashflow: $1,540/mo
• Annual: $18,484/yr
• Cap rate: 8.82%
• Cash-on-cash: 9.04%
• DSCR: 1.40
• 1% rule: 1.08%
• Cash to close: $204,400

Investor read

• This is a 5-bed/3.0-bath multifamily listed at $730k.
• At list price, monthly cash flow is $2k ($18k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $730k).
• It's been on market 29 days — a 2% lower offer ($719k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $719k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $22k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#769 in NY) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety B; Watch: schools D, amenities F, commute F.
• Patchogue-Medford Union Free School District (suburban): math 83% / reading 69% proficiency, ranked #73 of 590 in NY (top 12%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 216 active listings in the ZIP; solid renter incomes; 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.
• Current owner paid $339k; list at $730k implies a 115% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.1% rent growth), your $204k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.8% vs local median 3.1% in East Patchogue — 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 $7,874/mo this rent would consume 90% of the median local household income ($105k/yr) (locally 1595% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.