3 Chelsea St

Worcester, MA 01610

$950,000C

7 bd · 7.0 ba · 3,312 sqft · Built 1887 · MultiFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,860/mo
• Mortgage (P&I): −$4,982
• Tax + insurance: −$880
• HOA: −$0
• Vac / Maint / Mgmt: −$2,281
• Net cashflow: $2,717/mo
• Annual: $32,608/yr
• Cap rate: 9.73%
• Cash-on-cash: 12.26%
• DSCR: 1.55
• 1% rule: 1.14%
• Cash to close: $266,000

Investor read

• This is a 7 × 1-bed/?-bath units multifamily listed at $950k.
• At list price, monthly cash flow is $3k ($33k/yr) — positive. Per door: $388/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($11k rent vs $950k).
• It's been on market 38 days — a 3% lower offer ($922k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $922k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-0.7%/yr); year-one equity from $7k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 87/100 on livability (#9 in MA, #312 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, commute A+; Watch: schools C-, cost of living D.
• Worcester (urban): math 17% / reading 30% proficiency, ranked #280 of 302 in MA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1887 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.2%/yr); 25 active listings in the ZIP; 2,293 units permitted in Worcester County in 2024 (1,205 in 5+ unit buildings).
• 3 sale attempts since 11y ago; this cycle's ask has dropped $50k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $145k; list at $950k implies a 555% gain — meaningful room to come down on a strong offer.
• At projected returns (-0.7% appreciation + 0.0% rent growth), your $266k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.7% vs local median 4.1% in Worcester — 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 $10,860/mo this rent would consume 253% of the median local household income ($51k/yr) (locally 2517% 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 38 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 1887 — 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.