202 Head Of Pond Rd

Water Mill, NY 11976

$5,495,000B+

5 bd · 3.0 ba · 4,808 sqft · Built 2015 · SingleFamily · Active · 156 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $58,144/mo
• Mortgage (P&I): −$28,816
• Tax + insurance: −$3,304
• HOA: −$0
• Vac / Maint / Mgmt: −$12,210
• Net cashflow: $13,814/mo
• Annual: $165,764/yr
• Cap rate: 9.31%
• Cash-on-cash: 10.77%
• DSCR: 1.48
• 1% rule: 1.06%
• Cash to close: $1,538,600

Investor read

• This is a 5-bed/3.0-bath single-family listed at $5.50M.
• At list price, monthly cash flow is $14k ($166k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($58k rent vs $5.50M).
• It's been on market 156 days — a 12% lower offer ($4.84M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.84M (12.0% below list) — sets the bar for market timing.
• In year one you build about $512k of equity ($38k loan paydown + $474k 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.
• Market conditions: Rents rising fast (+30.1%/yr); 52 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 5 sale attempts since 14y 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 $2.95M; list at $5.50M implies a 86% gain — meaningful room to come down on a strong offer.
• At projected returns (8.6% appreciation + 8.0% rent growth), your $1.54M cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$821k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk; severe wind risk, 80% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• At $58,144/mo this rent would consume 387% 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 156 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.