521 E Main St

Mechanicstown, NY 10940

$449,900D+

4 bd · 3.0 ba · 1,480 sqft · Built 1900 · MultiFamily · Pending · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,204/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$707
• HOA: −$0
• Vac / Maint / Mgmt: −$883
• Net cashflow: $255/mo
• Annual: $3,057/yr
• Cap rate: 6.97%
• Cash-on-cash: 2.43%
• DSCR: 1.11
• 1% rule: 0.93%
• Cash to close: $125,972

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $450k.
• At list price, monthly cash flow is $255 ($3k/yr) — positive. Per door: $127/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $420k (6.6% below list).
• It's been on market 54 days — a 3% lower offer ($436k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $420k (6.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#375 in NY) — a middle-class / working-renter tenant base. Strengths: amenities A+, housing A+, health & safety A+; Watch: cost of living C-, crime D+, commute F.
• 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.
• Zoned schools: William A Carter School (math 12% / reading 32%, grade F, #1,923 of 2,108 statewide, top 92%, 777 students, 76% FRL); Middletown Twin Towers Middle School (math 10% / reading 42%, grade F, #595 of 729 statewide, top 82%, 858 students, 78% FRL); Middletown High School (math 90% / reading 92%, grade A+, #203 of 1,100 statewide, top 20%, 2,523 students, 71% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 273 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,746 units permitted in Orange County in 2024 (1,265 in 5+ unit buildings).
• 2 sale attempts since 18y ago; this cycle's ask has dropped $50k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $121k; list at $450k implies a 272% gain — meaningful room to come down on a strong offer.
• Cap rate 7.0% vs local median 3.1% in Mechanicstown — 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 $4,204/mo this rent would consume 58% 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 54 days. Have you received any prior offers? Is the seller open to a 7% 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 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?
• Crime grade is D 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?