11 Button St

New Haven, CT 06519

$550,000D

6 bd · 4.0 ba · 3,217 sqft · Built 2005 · MultiFamily · Under Contract · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,761/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$955
• HOA: −$0
• Vac / Maint / Mgmt: −$1,000
• Net cashflow: $-78/mo
• Annual: $-932/yr
• Cap rate: 6.24%
• Cash-on-cash: -0.17%
• DSCR: 0.99
• 1% rule: 0.87%
• Cash to close: $154,000

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $550k.
• At list price, monthly cash flow is $-78 ($-932/yr) — negative. Per door: $-39/mo.
• To cash-flow at today's rent, offer at most $536k (2.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $476k (13.4% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $476k (13.4% below list) — sets the bar for 1% rule.
• In year one you build about $58k of equity ($4k loan paydown + $54k appreciation (9.8% local appreciation)).
• 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: flood insurance adds $56/mo.
• Market conditions: Rents rising (+3.3%/yr); 46 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 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 21y 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 $391k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (9.8% appreciation + 3.3% rent growth), your $154k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$93k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk; major wind risk, 55% 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 6.2% vs local median 4.8% in New Haven — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $4,761/mo this rent would consume 115% of the median local household income ($50k/yr) (locally 1321% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?