22 Clay St

New Haven, CT 06513

$539,000B-

5 bd · 3.0 ba · 3,584 sqft · Built 1900 · MultiFamily · Under Contract · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,042/mo
• Mortgage (P&I): −$2,827
• Tax + insurance: −$820
• HOA: −$0
• Vac / Maint / Mgmt: −$1,689
• Net cashflow: $2,706/mo
• Annual: $32,476/yr
• Cap rate: 12.32%
• Cash-on-cash: 21.52%
• DSCR: 1.96
• 1% rule: 1.49%
• Cash to close: $150,920

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $539k.
• At list price, monthly cash flow is $3k ($32k/yr) — positive. Per door: $902/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($8k rent vs $539k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#31 in CT, #2,190 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A+; Watch: schools D+, employment D, crime F.
• New Haven School District (urban): math 12% / reading 25% proficiency, ranked #147 of 153 in CT (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 101 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 1,059 units permitted in South Central Connecticut Planning Region in 2024 (779 in 5+ unit buildings).
• 2 sale attempts since 5y 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 $335k; list at $539k implies a 61% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $151k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wind risk, 56% 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 12.3% vs local median 4.8% in New Haven — 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 $8,042/mo this rent would consume 199% of the median local household income ($48k/yr) (locally 2664% 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?
• Crime grade is F 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.