530 Main St

Middletown, CT 06457

$1,500,000B

1 bd · 1.0 ba · 11,033 sqft · Built 1860 · MultiFamily · Under Contract · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $24,961/mo
• Mortgage (P&I): −$7,866
• Tax + insurance: −$2,500
• HOA: −$0
• Vac / Maint / Mgmt: −$5,242
• Net cashflow: $9,353/mo
• Annual: $112,236/yr
• Cap rate: 13.78%
• Cash-on-cash: 26.72%
• DSCR: 2.19
• 1% rule: 1.66%
• Cash to close: $420,000

Investor read

• This is a 1-bed/1.0-bath multifamily listed at $1.50M. Condition is rated good.
• At list price, monthly cash flow is $9k ($112k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($25k rent vs $1.50M).
• It's been on market 17 days — a 2% lower offer ($1.48M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.48M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#17 in CT, #1,390 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Middletown School District (urban): math 24% / reading 44% proficiency, ranked #113 of 153 in CT (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Macdonough School (math 32% / reading 42%, grade F, #318 of 553 statewide, top 60%, 227 students, 66% FRL); Middletown High School (math 25% / reading 52%, grade F, #111 of 194 statewide, top 57%, 1,214 students, 49% FRL) — zoned schools average 58% FRL vs 38% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1860 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 143 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 278 units permitted in Lower Connecticut River Valley Planning Region in 2024 (89 in 5+ unit buildings).
• 5 sale attempts since 16y 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 projected returns (-3.0% appreciation + 0.2% rent growth), your $420k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 13.8% vs local median 3.7% in Middletown — 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 $24,961/mo this rent would consume 377% of the median local household income ($79k/yr) (locally 2196% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1860 — 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.
• 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.