376 Hertel Ave

Buffalo, NY 14207

$199,000B-

3 bd · 2.0 ba · 1,960 sqft · Built 1850 · MultiFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,744/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$133
• HOA: −$0
• Vac / Maint / Mgmt: −$576
• Net cashflow: $991/mo
• Annual: $11,897/yr
• Cap rate: 12.27%
• Cash-on-cash: 21.35%
• DSCR: 1.95
• 1% rule: 1.38%
• Cash to close: $55,720

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $199k.
• At list price, monthly cash flow is $991 ($12k/yr) — positive. Per door: $496/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $199k).
• It's been on market 15 days — a 2% lower offer ($196k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k 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 1850 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 197 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 1,244 units permitted in Erie County in 2024 (563 in 5+ unit buildings).
• 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 $156k; 28% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.3% vs local median 8.0% in Buffalo — 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 $2,744/mo this rent would consume 83% of the median local household income ($40k/yr) (locally 2177% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 1850 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.