12 Magnolia Dr Unit 2C

Water Mill, NY 11976

$2,195,000A-

4 bd · 4.0 ba · 2,574 sqft · Built 2023 · Condo · Pending · 158 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $51,971/mo
• Mortgage (P&I): −$11,511
• Tax + insurance: −$3,658
• HOA: −$1,000
• Vac / Maint / Mgmt: −$10,914
• Net cashflow: $24,888/mo
• Annual: $298,659/yr
• Cap rate: 19.90%
• Cash-on-cash: 48.59%
• DSCR: 3.16
• 1% rule: 2.37%
• Cash to close: $614,600

Investor read

• This is a 4-bed/4.0-bath condo listed at $2.19M.
• At list price, monthly cash flow is $25k ($299k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($52k rent vs $2.19M).
• It's been on market 158 days — a 12% lower offer ($1.93M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.93M (12.0% below list) — sets the bar for market timing.
• In year one you build about $205k of equity ($15k loan paydown + $189k 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 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; 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.
• At projected returns (8.6% appreciation + 8.0% rent growth), your $615k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$328k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 8→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 19.9% 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 $51,971/mo this rent would consume 346% of the median local household income ($180k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 158 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.