40 Prospect St

Windsor Locks, CT 06095

$440,000C-

4 bd · 2.0 ba · 2,287 sqft · Built 1875 · MultiFamily · Under Contract · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,617/mo
• Mortgage (P&I): −$2,307
• Tax + insurance: −$640
• HOA: −$0
• Vac / Maint / Mgmt: −$970
• Net cashflow: $701/mo
• Annual: $8,406/yr
• Cap rate: 8.20%
• Cash-on-cash: 6.82%
• DSCR: 1.30
• 1% rule: 1.05%
• Cash to close: $123,200

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $440k.
• At list price, monthly cash flow is $701 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $440k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#65 in CT, #4,599 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Windsor School District (suburban): math 29% / reading 41% proficiency, ranked #107 of 153 in CT (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Oliver Ellsworth School (431 students, 41% FRL); Sage Park Middle School (math 29% / reading 40%, grade F, #124 of 175 statewide, top 72%, 698 students, 44% FRL); Windsor High School (math 26% / reading 55%, grade F, #104 of 194 statewide, top 54%, 1,100 students, 39% FRL).
• Watch-outs: built in 1875 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 104 active listings in the ZIP; solid renter incomes; 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 3 sale attempts since 25y 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 $143k; list at $440k implies a 208% 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→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.2% vs local median 3.9% in Windsor Locks — 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 $4,617/mo this rent would consume 53% of the median local household income ($105k/yr) (locally 555% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1875 — 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.
• 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.