26 Phelps St

East Hartford, CT 06108

$235,000C+

2 bd · 2.0 ba · 1,331 sqft · Built 1900 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,969/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$534
• HOA: −$0
• Vac / Maint / Mgmt: −$623
• Net cashflow: $580/mo
• Annual: $6,955/yr
• Cap rate: 9.25%
• Cash-on-cash: 10.57%
• DSCR: 1.47
• 1% rule: 1.26%
• Cash to close: $65,800

Investor read

• This is a 2 × 1-bed/1.0-bath units multifamily listed at $235k.
• At list price, monthly cash flow is $580 ($7k/yr) — positive. Per door: $290/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $235k).
• It's been on market 17 days — a 2% lower offer ($231k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $231k (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 $7k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#76 in CT) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A, commute A-; Watch: schools D+, amenities F, health & safety F.
• East Hartford School District (urban): math 17% / reading 30% proficiency, ranked #140 of 153 in CT (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 47 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 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 9.3% vs local median 4.2% in East Hartford — 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 $2,969/mo this rent would consume 63% of the median local household income ($57k/yr) (locally 1205% 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.