985 Bank St

Waterbury, CT 06708

$3,960,000B-

3 bd · 1.0 ba · 10,052 sqft · Built 1920 · MultiFamily · Active · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $49,850/mo
• Mortgage (P&I): −$20,767
• Tax + insurance: −$4,779
• HOA: −$0
• Vac / Maint / Mgmt: −$10,468
• Net cashflow: $13,836/mo
• Annual: $166,032/yr
• Cap rate: 10.49%
• Cash-on-cash: 14.97%
• DSCR: 1.67
• 1% rule: 1.26%
• Cash to close: $1,108,800

Investor read

• This is a 3-bed/1.0-bath multifamily listed at $3.96M.
• 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 ($50k rent vs $3.96M).
• It's been on market 41 days — a 3% lower offer ($3.84M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.84M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $27k of loan paydown is wiped out by about $119k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#32 in CT, #2,205 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D+, crime D, employment D.
• Waterbury School District (suburban): math 12% / reading 23% proficiency, ranked #148 of 153 in CT (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.8%/yr); 121 active listings in the ZIP; 502 units permitted in Naugatuck Valley Planning Region in 2024 (171 in 5+ unit buildings).
• 4 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 $500k; list at $3.96M implies a 692% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $1.11M cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.5% vs local median 3.6% in Waterbury — 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 $49,850/mo this rent would consume 888% of the median local household income ($67k/yr) (locally 1276% 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 41 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• 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?
• Crime grade is D 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.