41 Stuart Ave

New London, CT 06320

$564,000C

4 bd · 4.0 ba · 2,834 sqft · Built 1908 · MultiFamily · Under Contract · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,374/mo
• Mortgage (P&I): −$2,958
• Tax + insurance: −$1,095
• HOA: −$0
• Vac / Maint / Mgmt: −$1,339
• Net cashflow: $983/mo
• Annual: $11,792/yr
• Cap rate: 9.29%
• Cash-on-cash: 10.71%
• DSCR: 1.48
• 1% rule: 1.13%
• Cash to close: $157,920

Investor read

• This is a 3 × 3-bed/1.7-bath units multifamily listed at $564k.
• At list price, monthly cash flow is $983 ($12k/yr) — positive. Per door: $328/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $564k).
• It's been on market 41 days — a 3% lower offer ($547k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $547k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#66 in CT, #4,772 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, housing A-, crime B+; Watch: employment D+, schools F, amenities F.
• New London School District (urban): math 11% / reading 21% proficiency, ranked #149 of 153 in CT (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $427/mo; built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 69 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 19 sale attempts since 12y 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 $365k; list at $564k implies a 55% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 80% 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 9.3% vs local median 4.3% in New London — 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 $6,374/mo this rent would consume 129% of the median local household income ($59k/yr) (locally 2014% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 41 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1908 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-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.