597-605 Elmwood Ave

Buffalo, NY 14222

$2,500,000F

1617 bd · None ba · 36,452 sqft · Built 1900 · MultiFamily · Pending · 122 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,592/mo
• Mortgage (P&I): −$13,110
• Tax + insurance: −$1,966
• HOA: −$0
• Vac / Maint / Mgmt: −$2,644
• Net cashflow: $-5,129/mo
• Annual: $-61,548/yr
• Cap rate: 3.83%
• Cash-on-cash: -8.79%
• DSCR: 0.61
• 1% rule: 0.50%
• Cash to close: $700,000

Investor read

• This is a 5 × 323-bed/?-bath units multifamily listed at $2.50M.
• At list price, monthly cash flow is $-5k ($-62k/yr) — negative. Per door: $-1k/mo.
• To cash-flow at today's rent, offer at most $1.59M (36.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.26M (49.6% below list).
• It's been on market 122 days — a 12% lower offer ($2.20M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.26M (49.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $75k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#195 in NY, #3,011 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: crime F, employment D-.
• Buffalo City School District (urban): math 41% / reading 40% proficiency, ranked #535 of 590 in NY (top 91%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 75% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 63 active listings in the ZIP; solid renter incomes; 1,244 units permitted in Erie County in 2024 (563 in 5+ unit buildings).
• Current owner paid $2.00M; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.8% vs local median 8.0% in Buffalo — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $12,592/mo this rent would consume 185% of the median local household income ($82k/yr) (locally 978% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 122 days. Have you received any prior offers? Is the seller open to a 50% concession, seller financing, or rate buy-down credit?
• 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 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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?