106-108 Chestnut St

Manchester, CT 06040

$359,000B-

7 bd · 2.0 ba · 3,805 sqft · Built 1905 · MultiFamily · Under Contract · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,390/mo
• Mortgage (P&I): −$1,883
• Tax + insurance: −$805
• HOA: −$0
• Vac / Maint / Mgmt: −$922
• Net cashflow: $780/mo
• Annual: $9,363/yr
• Cap rate: 8.90%
• Cash-on-cash: 9.31%
• DSCR: 1.41
• 1% rule: 1.22%
• Cash to close: $100,520

Investor read

• This is a 2 × 3-bed/1.0-bath units multifamily listed at $359k.
• At list price, monthly cash flow is $780 ($9k/yr) — positive. Per door: $390/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $359k).
• It's been on market 18 days — a 2% lower offer ($354k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $354k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#59 in CT, #3,580 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A-; Watch: amenities D, commute F.
• Manchester School District (suburban): math 21% / reading 32% proficiency, ranked #130 of 153 in CT (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1905 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.0%/yr); 99 active listings in the ZIP; solid renter incomes; 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 3 sale attempts since 22y 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 $226k; list at $359k implies a 59% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% 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 8.9% vs local median 3.8% in Manchester — 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 $4,390/mo this rent would consume 63% of the median local household income ($83k/yr) (locally 1839% 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 1905 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.