5 Pearl St

Forestville, NY 14062

$76,500B+

4 bd · 3.0 ba · 2,574 sqft · Built 1890 · MultiFamily · Pending · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,186/mo
• Mortgage (P&I): −$401
• Tax + insurance: −$274
• HOA: −$0
• Vac / Maint / Mgmt: −$669
• Net cashflow: $1,842/mo
• Annual: $22,103/yr
• Cap rate: 35.19%
• Cash-on-cash: 103.19%
• DSCR: 5.59
• 1% rule: 4.16%
• Cash to close: $21,420

Investor read

• This is a 3 × 4-bed/3.0-bath units multifamily listed at $76k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive. Per door: $614/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $76k).
• It's been on market 16 days — a 2% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (1.5% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($529 loan paydown + $4k appreciation (4.9% local appreciation)).
• Location reads 60/100 on livability (#982 in NY) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools B; Watch: employment D, crime F, amenities F.
• Forestville Central School District (rural): math 55% / reading 53% proficiency, ranked #380 of 755 in NY (top 50%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 3.8% of price; built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 18 active listings in the ZIP; 127 units permitted in Chautauqua County in 2024 (0 in 5+ unit buildings).
• Chautauqua County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $60k; 28% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (4.9% appreciation + 3.0% rent growth), your $21k cash investment doubles in ~1 year — after that, you're playing with house money.
• By year 8, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• 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 1890 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.