407 Potomac Ave

Buffalo, NY 14213

$409,900B

8 bd · 3.0 ba · 3,340 sqft · Built 1900 · MultiFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,532/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$270
• HOA: −$0
• Vac / Maint / Mgmt: −$952
• Net cashflow: $1,161/mo
• Annual: $13,929/yr
• Cap rate: 9.69%
• Cash-on-cash: 12.14%
• DSCR: 1.54
• 1% rule: 1.11%
• Cash to close: $114,772

Investor read

• This is a 8-bed/3.0-bath multifamily listed at $410k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• 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 27 days — a 2% lower offer ($404k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $404k (1.5% below list) — sets the bar for market timing.
• In year one you build about $34k of equity ($3k loan paydown + $31k appreciation (7.5% local appreciation)).
• Location reads 77/100 on livability (#195 in NY, #3,011 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: crime F, employment D-.
• Buffalo City School District (urban): math 41% / reading 40% proficiency, ranked #535 of 590 in NY (top 91%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 75% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.5%/yr); 137 active listings in the ZIP; 1,244 units permitted in Erie County in 2024 (563 in 5+ unit buildings).
• 3 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $230k; list at $410k implies a 78% gain — meaningful room to come down on a strong offer.
• At projected returns (7.5% appreciation + 0.0% rent growth), your $115k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$54k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 9.7% vs local median 8.0% in Buffalo — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $4,532/mo this rent would consume 101% of the median local household income ($54k/yr) (locally 1501% 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.
• Crime grade is F 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?
• 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.