40 Ocean Ave

Northport, NY 11768

$979,000D-

6 bd · 5.4 ba · — sqft · Built 1910 · MultiFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,394/mo
• Mortgage (P&I): −$5,134
• Tax + insurance: −$1,190
• HOA: −$0
• Vac / Maint / Mgmt: −$1,763
• Net cashflow: $307/mo
• Annual: $3,685/yr
• Cap rate: 6.75%
• Cash-on-cash: 1.64%
• DSCR: 1.07
• 1% rule: 0.86%
• Cash to close: $274,120

Investor read

• This is a 3 × 2-bed/1.8-bath units multifamily listed at $979k.
• At list price, monthly cash flow is $307 ($4k/yr) — positive. Per door: $102/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $839k (14.3% below list).
• It's been on market 22 days — a 2% lower offer ($964k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $839k (14.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $29k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#202 in NY, #3,128 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: commute F, cost of living F.
• Northport-East Northport Union Free School District (suburban): math 74% / reading 65% proficiency, ranked #101 of 590 in NY (top 17%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 7% free/reduced lunch — higher-income household profile.
• Watch-outs: flood insurance adds $66/mo; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 141 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 2 sale attempts since 3y ago 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 $281k; list at $979k implies a 248% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk; severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 2.0% in Northport — 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.

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 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.