119 Jefferson Ave

New London, CT 06320

$285,000B+

5 bd · 3.0 ba · 1,936 sqft · Built 1890 · MultiFamily · Under Contract · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,741/mo
• Mortgage (P&I): −$1,495
• Tax + insurance: −$355
• HOA: −$0
• Vac / Maint / Mgmt: −$1,416
• Net cashflow: $3,476/mo
• Annual: $41,711/yr
• Cap rate: 20.93%
• Cash-on-cash: 52.27%
• DSCR: 3.33
• 1% rule: 2.37%
• Cash to close: $79,800

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $285k.
• At list price, monthly cash flow is $3k ($42k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $285k).
• 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 $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#66 in CT, #4,772 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, housing A-, crime B+; Watch: employment D+, amenities F, commute F.
• New London School District (urban): math 11% / reading 21% proficiency, ranked #149 of 153 in CT (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: New London High School (math 2% / reading 12%, grade F, #188 of 194 statewide, top 98%, 532 students, 93% FRL) — zoned schools average 93% FRL vs 72% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 69 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 3 sale attempts since 23y 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 $228k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 0.7% rent growth), your $80k cash investment doubles in ~3 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 20.9% vs local median 4.3% in New London — 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 $6,741/mo this rent would consume 137% of the median local household income ($59k/yr) (locally 2014% 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 1890 — 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.