16 Liberty St

Middletown, NY 10940

$320,000B+

5 bd · 2.0 ba · 1,692 sqft · Built 1868 · MultiFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,168/mo
• Mortgage (P&I): −$1,678
• Tax + insurance: −$633
• HOA: −$0
• Vac / Maint / Mgmt: −$875
• Net cashflow: $981/mo
• Annual: $11,775/yr
• Cap rate: 9.97%
• Cash-on-cash: 13.14%
• DSCR: 1.58
• 1% rule: 1.30%
• Cash to close: $89,600

Investor read

• This is a 5-bed/2.0-bath multifamily listed at $320k.
• At list price, monthly cash flow is $981 ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $320k).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#79 in NY, #1,219 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, housing A+, health & safety A+; Watch: commute C-.
• 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: Presidential Park Elementary School (math 19% / reading 37%, grade F, #1,774 of 2,108 statewide, top 84%, 1,300 students, 76% FRL); Monhagen Middle School (math 16% / reading 39%, grade F, #576 of 729 statewide, top 79%, 817 students, 75% 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 1868 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 273 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1,746 units permitted in Orange County in 2024 (1,265 in 5+ unit buildings).
• Current owner paid $13k; list at $320k implies a 2362% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $90k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 10.0% vs local median 3.3% in Middletown — 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 $4,168/mo this rent would consume 57% 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

• Built in 1868 — 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.