18 Division St

Norwich, CT 06360

$315,000C

4 bd · 3.0 ba · 2,240 sqft · Built 2006 · MultiFamily · Under Contract · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,713/mo
• Mortgage (P&I): −$1,652
• Tax + insurance: −$507
• HOA: −$0
• Vac / Maint / Mgmt: −$780
• Net cashflow: $775/mo
• Annual: $9,298/yr
• Cap rate: 9.24%
• Cash-on-cash: 10.54%
• DSCR: 1.47
• 1% rule: 1.18%
• Cash to close: $88,200

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $315k.
• At list price, monthly cash flow is $775 ($9k/yr) — positive. Per door: $387/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $315k).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#18 in CT, #1,391 nationally) — a professional / high-income tenant draw. Strengths: housing A+, health & safety A+, commute A-; Watch: schools D+.
• Norwich School District (urban): math 19% / reading 29% proficiency, ranked #139 of 153 in CT (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+6.6%/yr); 243 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 4 sale attempts since 20y 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 $120k; list at $315k implies a 162% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 6.6% rent growth), your $88k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 63% 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 9.2% vs local median 4.1% in Norwich — 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 $3,713/mo this rent would consume 68% of the median local household income ($66k/yr) (locally 1643% 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?
• 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.