524 Prospect St

Torrington, CT 06790

$449,900C-

7 bd · 3.0 ba · 2,993 sqft · Built 1910 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,986/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$587
• HOA: −$0
• Vac / Maint / Mgmt: −$1,047
• Net cashflow: $992/mo
• Annual: $11,908/yr
• Cap rate: 8.94%
• Cash-on-cash: 9.45%
• DSCR: 1.42
• 1% rule: 1.11%
• Cash to close: $125,972

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $450k.
• At list price, monthly cash flow is $992 ($12k/yr) — positive. Per door: $331/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $450k).
• Only 6 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 76/100 on livability (#53 in CT, #3,449 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools D, commute F.
• Torrington School District (town): math 22% / reading 39% proficiency, ranked #125 of 153 in CT (top 82%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.9%/yr); 188 active listings in the ZIP; 154 units permitted in Northwest Hills Planning Region in 2024 (6 in 5+ unit buildings).
• 2 sale attempts since 5y ago; this cycle's ask is 50% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $347k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 5.9% rent growth), your $126k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; moderate wind risk, 26% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.9% vs local median 3.9% in Torrington — 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 $4,986/mo this rent would consume 84% of the median local household income ($71k/yr) (locally 1401% 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 1910 — 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?
• 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.