85 Furnace St

Danielson, CT 06239

$325,000C

5 bd · 3.0 ba · 2,542 sqft · Built 1910 · MultiFamily · Under Contract · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,385/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$360
• HOA: −$0
• Vac / Maint / Mgmt: −$711
• Net cashflow: $610/mo
• Annual: $7,315/yr
• Cap rate: 8.54%
• Cash-on-cash: 8.04%
• DSCR: 1.36
• 1% rule: 1.04%
• Cash to close: $91,000

Investor read

• This is a 2 × 2-bed/0.5-bath units multifamily listed at $325k.
• At list price, monthly cash flow is $610 ($7k/yr) — positive. Per door: $305/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $325k).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#5 in CT, #679 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, housing A+; Watch: employment D, schools F.
• Killingly School District (rural): math 21% / reading 44% proficiency, ranked #119 of 153 in CT (top 78%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 63 active listings in the ZIP; 149 units permitted in Northeastern Connecticut Planning Region in 2024 (0 in 5+ unit buildings).
• 11 sale attempts since 19y 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 $127k; list at $325k implies a 156% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 61% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.5% vs local median 4.1% in Danielson — 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 $3,385/mo this rent would consume 55% of the median local household income ($74k/yr) (locally 223% 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 1910 — 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 F-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 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.