236 Edgemere St #223

Montauk, NY 11954

$675,000B+

1 bd · 2.0 ba · 639 sqft · Built 1927 · MultiFamily · Pending · 95 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,275/mo
• Mortgage (P&I): −$3,540
• Tax + insurance: −$416
• HOA: −$2,450
• Vac / Maint / Mgmt: −$2,578
• Net cashflow: $3,292/mo
• Annual: $39,504/yr
• Cap rate: 12.15%
• Cash-on-cash: 20.90%
• DSCR: 1.93
• 1% rule: 1.82%
• Cash to close: $189,000

Investor read

• This is a 1-bed/2.0-bath multifamily listed at $675k.
• At list price, monthly cash flow is $3k ($40k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($12k rent vs $675k).
• It's been on market 95 days — a 9% lower offer ($614k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $614k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-1.8%/yr); year-one equity from $5k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#474 in NY) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, health & safety A; Watch: housing C-, amenities F, commute F.
• Montauk Union Free School District (town): math 50% / reading 60% proficiency, ranked #311 of 755 in NY (top 41%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Montauk School (math 62% / reading 82%, grade A-, #378 of 2,108 statewide, top 20%, 303 students, 0% FRL) — zoned schools average 0% FRL vs 21% district-wide (21 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 72% at this address vs 55% district-wide (+17 pts) — the actual schools serving this property are materially stronger than the Montauk Union Free School District average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: built in 1927 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 39 active listings in the ZIP; 2 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.
• Current owner paid $550k; 23% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-1.8% appreciation + 3.0% rent growth), your $189k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 12.1% vs local median 7.9% in Montauk — 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 $12,275/mo this rent would consume 103% of the median local household income ($143k/yr) (locally 20% 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 95 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1927 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.