278 Willow St

Waterbury, CT 06710

$475,000C-

9 bd · 3.0 ba · 3,600 sqft · Built 1898 · MultiFamily · Under Contract · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,491/mo
• Mortgage (P&I): −$2,491
• Tax + insurance: −$502
• HOA: −$0
• Vac / Maint / Mgmt: −$1,153
• Net cashflow: $1,345/mo
• Annual: $16,143/yr
• Cap rate: 9.69%
• Cash-on-cash: 12.14%
• DSCR: 1.54
• 1% rule: 1.16%
• Cash to close: $133,000

Investor read

• This is a 2×3bd/1.7ba + 1×4bd/2ba units multifamily listed at $475k.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $448/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $475k).
• It's been on market 21 days — a 2% lower offer ($468k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $468k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#32 in CT, #2,205 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D+, crime D, employment D.
• Waterbury School District (suburban): math 12% / reading 23% proficiency, ranked #148 of 153 in CT (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1898 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.4%/yr); 32 active listings in the ZIP; 1 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 502 units permitted in Naugatuck Valley Planning Region in 2024 (171 in 5+ unit buildings).
• 4 sale attempts since 8y 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 $44k; list at $475k implies a 980% 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→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.7% vs local median 3.6% in Waterbury — 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 $5,491/mo this rent would consume 177% of the median local household income ($37k/yr) (locally 856% 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 1898 — 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?
• 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.