242 Norwood Ave

Buffalo, NY 14222

$540,000D

5 bd · 3.5 ba · 3,102 sqft · Built 1894 · MultiFamily · Pending · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,962/mo
• Mortgage (P&I): −$2,832
• Tax + insurance: −$373
• HOA: −$0
• Vac / Maint / Mgmt: −$1,042
• Net cashflow: $716/mo
• Annual: $8,587/yr
• Cap rate: 7.88%
• Cash-on-cash: 5.68%
• DSCR: 1.25
• 1% rule: 0.92%
• Cash to close: $151,200

Investor read

• This is a 1×3bd/1.0ba + 2×1bd/1.0ba units multifamily listed at $540k.
• At list price, monthly cash flow is $716 ($9k/yr) — positive. Per door: $239/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 $496k (8.1% below list).
• It's been on market 61 days — a 6% lower offer ($508k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $496k (8.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k 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 1894 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 63 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1,244 units permitted in Erie County in 2024 (563 in 5+ unit buildings).
• 7 sale attempts since 9y 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.
• At $4,962/mo this rent would consume 73% 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

• It's been on market 61 days. Have you received any prior offers? Is the seller open to a 8% 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 1894 — 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?
• 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?