166 High St

Westerly, RI 02891

$765,000C

5 bd · 3.0 ba · 3,316 sqft · Built 1919 · MultiFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,606/mo
• Mortgage (P&I): −$4,012
• Tax + insurance: −$726
• HOA: −$0
• Vac / Maint / Mgmt: −$1,807
• Net cashflow: $2,061/mo
• Annual: $24,728/yr
• Cap rate: 9.53%
• Cash-on-cash: 11.54%
• DSCR: 1.51
• 1% rule: 1.12%
• Cash to close: $214,200

Investor read

• This is a 3 × 4-bed/4.0-bath units multifamily listed at $765k.
• At list price, monthly cash flow is $2k ($25k/yr) — positive. Per door: $687/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $765k).
• It's been on market 22 days — a 2% lower offer ($754k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $754k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $23k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#10 in RI, #4,529 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: cost of living D+, amenities F, commute F.
• Westerly (suburban): math 19% / reading 39% proficiency, ranked #21 of 39 in RI (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Springbrook Elementary School (math 17% / reading 37%, grade F, #82 of 167 statewide, top 53%, 260 students, 52% FRL); Westerly Middle School (math 13% / reading 34%, grade F, #29 of 57 statewide, top 52%, 697 students, 39% FRL); Westerly High School (math 27% / reading 57%, grade F, #21 of 58 statewide, top 35%, 699 students, 31% FRL).
• Watch-outs: built in 1919 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+11.7%/yr); 114 active listings in the ZIP; solid renter incomes; 311 units permitted in Washington County in 2024 (45 in 5+ unit buildings).
• Washington County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 14y 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 $490k; list at $765k implies a 56% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $214k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.5% vs local median 2.9% in Westerly — 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.

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 1919 — 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.