4 Oak St

Derby, CT 06418

$550,000C-

7 bd · 3.5 ba · 2,800 sqft · Built 1988 · MultiFamily · Under Contract · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,649/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$725
• HOA: −$0
• Vac / Maint / Mgmt: −$1,186
• Net cashflow: $853/mo
• Annual: $10,238/yr
• Cap rate: 8.15%
• Cash-on-cash: 6.65%
• DSCR: 1.30
• 1% rule: 1.03%
• Cash to close: $154,000

Investor read

• This is a 3 × 2-bed/1-bath units multifamily listed at $550k.
• At list price, monthly cash flow is $853 ($10k/yr) — positive. Per door: $284/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $550k).
• Only 7 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 74/100 on livability (#64 in CT, #4,574 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living B; Watch: crime D+, employment D+, amenities F.
• Derby School District (suburban): math 22% / reading 36% proficiency, ranked #127 of 153 in CT (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Irving School (math 12% / reading 22%, grade F, #459 of 553 statewide, top 84%, 306 students, 65% FRL); Derby Middle School (math 20% / reading 40%, grade F, #139 of 175 statewide, top 79%, 291 students, 54% FRL); Derby High School (math 5% / reading 34%, grade F, #165 of 194 statewide, top 87%, 369 students, 51% FRL).
• Market conditions: 40 active listings in the ZIP; solid renter incomes; 502 units permitted in Naugatuck Valley Planning Region in 2024 (171 in 5+ unit buildings).
• 2 sale attempts since 30y 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 $156k; list at $550k implies a 254% 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 8.2% vs local median 4.0% in Derby — 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 $5,649/mo this rent would consume 86% of the median local household income ($79k/yr) (locally 711% 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?
• 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 D 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.
• 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.