1221 Washington St #8

Middletown, CT 06457

$198,000F

1 bd · 1.0 ba · 845 sqft · Built 1985 · Condo · Active · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,743/mo
• Mortgage (P&I): −$1,038
• Tax + insurance: −$287
• HOA: −$441
• Vac / Maint / Mgmt: −$366
• Net cashflow: $-389/mo
• Annual: $-4,673/yr
• Cap rate: 3.93%
• Cash-on-cash: -8.43%
• DSCR: 0.62
• 1% rule: 0.88%
• Cash to close: $55,440

Investor read

• This is a 1-bed/1.0-bath condo listed at $198k.
• At list price, monthly cash flow is $-389 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $129k (34.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $174k (12.0% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $129k (34.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#17 in CT, #1,390 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Middletown School District (urban): math 24% / reading 44% proficiency, ranked #113 of 153 in CT (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Snow School (math 27% / reading 52%, grade F, #298 of 553 statewide, top 56%, 332 students, 54% FRL); Beman Middle School (math 19% / reading 44%, grade F, #134 of 175 statewide, top 77%, 968 students, 49% FRL); Middletown High School (math 25% / reading 52%, grade F, #111 of 194 statewide, top 57%, 1,214 students, 49% FRL).
• Watch-outs: HOA is 25% of rent.
• Market conditions: Rents flat; 147 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 278 units permitted in Lower Connecticut River Valley Planning Region in 2024 (89 in 5+ unit buildings).
• 4 sale attempts since 16y 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.
• 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.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.