38 Railroad Ave

East Hampton North, NY 11937

$2,299,000B

5 bd · 3.0 ba · 3,300 sqft · Built 2022 · SingleFamily · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $25,450/mo
• Mortgage (P&I): −$12,056
• Tax + insurance: −$1,590
• HOA: −$0
• Vac / Maint / Mgmt: −$5,345
• Net cashflow: $6,460/mo
• Annual: $77,517/yr
• Cap rate: 9.66%
• Cash-on-cash: 12.04%
• DSCR: 1.54
• 1% rule: 1.11%
• Cash to close: $643,720

Investor read

• This is a 5-bed/3.0-bath single-family listed at $2.30M.
• At list price, monthly cash flow is $6k ($78k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($25k rent vs $2.30M).
• It's been on market 80 days — a 6% lower offer ($2.16M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.16M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $16k of loan paydown is wiped out by about $69k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#1,013 in NY) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+; Watch: schools D, amenities F, commute F.
• East Hampton Union Free School District (town): math 62% / reading 66% proficiency, ranked #159 of 590 in NY (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+12.3%/yr); 135 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• Current owner paid $400k; list at $2.30M implies a 475% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $644k cash investment doubles in ~7 years — after that, you're playing with house money.
• At $25,450/mo this rent would consume 235% of the median local household income ($130k/yr) (locally 896% 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 80 days. Have you received any prior offers? Is the seller open to a 6% 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.