2 Hickory Ln

Water Mill, NY 11976

$2,995,000A-

4 bd · 4.0 ba · 3,402 sqft · Built 2024 · MultiFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $52,266/mo
• Mortgage (P&I): −$15,706
• Tax + insurance: −$4,992
• HOA: −$0
• Vac / Maint / Mgmt: −$10,976
• Net cashflow: $20,593/mo
• Annual: $247,111/yr
• Cap rate: 14.54%
• Cash-on-cash: 29.47%
• DSCR: 2.31
• 1% rule: 1.75%
• Cash to close: $838,600

Investor read

• This is a 4-bed/4.0-bath multifamily listed at $3.00M.
• At list price, monthly cash flow is $21k ($247k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($52k rent vs $3.00M).
• It's been on market 27 days — a 2% lower offer ($2.95M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.95M (1.5% below list) — sets the bar for market timing.
• In year one you build about $279k of equity ($21k loan paydown + $258k appreciation (8.6% local appreciation)).
• Location reads 71/100 on livability (#410 in NY) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, commute A-; Watch: amenities F, cost of living F, housing F.
• Southampton Union Free School District (suburban): math 53% / reading 51% proficiency, ranked #293 of 590 in NY (top 50%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Southampton Elementary School (math 42% / reading 57%, grade D, #1,085 of 2,108 statewide, top 56%, 376 students, 51% FRL); Southampton Intermediate School (math 30% / reading 47%, grade F, #437 of 729 statewide, top 60%, 363 students, 44% FRL); Southampton High School (math 98%, 595 students, 48% FRL) — zoned schools average 48% FRL vs 30% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+30.1%/yr); 52 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 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 $2.27M; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (8.6% appreciation + 8.0% rent growth), your $839k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$447k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 14.5% vs local median 10.6% in Water Mill — 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 $52,266/mo this rent would consume 348% of the median local household income ($180k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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.