8 Mann Ave

Newport, RI 02840

$699,900C-

3 bd · 2.0 ba · 1,795 sqft · Built 1900 · MultiFamily · Active · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,938/mo
• Mortgage (P&I): −$3,670
• Tax + insurance: −$616
• HOA: −$0
• Vac / Maint / Mgmt: −$1,457
• Net cashflow: $1,194/mo
• Annual: $14,332/yr
• Cap rate: 8.34%
• Cash-on-cash: 7.31%
• DSCR: 1.33
• 1% rule: 0.99%
• Cash to close: $195,972

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $700k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $597/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $694k (0.9% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $694k (0.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#5 in RI, #2,367 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A+; Watch: cost of living F.
• Newport (suburban): math 10% / reading 20% proficiency, ranked #29 of 39 in RI (top 74%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Claiborne Pell Elementary (math 10% / reading 23%, grade F, #124 of 167 statewide, top 74%, 697 students, 70% FRL); Frank E. Thompson Middle (math 8% / reading 16%, grade F, #42 of 57 statewide, top 75%, 546 students, 77% FRL); Rogers High School (math 17% / reading 32%, grade F, #35 of 58 statewide, top 60%, 633 students, 72% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.3%/yr); 136 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 94 units permitted in Newport County in 2024 (0 in 5+ unit buildings).
• Newport County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $196k cash investment doubles in ~9 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→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.3% vs local median 2.3% in Newport — 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 $6,938/mo this rent would consume 97% of the median local household income ($86k/yr) (locally 1294% 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 1900 — 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?
• 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.