138 Salem Dr

Cromwell, CT 06416

$290,000D-

2 bd · 2.5 ba · 1,218 sqft · Built 1983 · Condo · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,243/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$416
• HOA: −$0
• Vac / Maint / Mgmt: −$471
• Net cashflow: $-165/mo
• Annual: $-1,981/yr
• Cap rate: 5.61%
• Cash-on-cash: -2.44%
• DSCR: 0.89
• 1% rule: 0.77%
• Cash to close: $81,200

Investor read

• This is a 2-bed/2.5-bath condo listed at $290k.
• At list price, monthly cash flow is $-165 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $261k (10.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $224k (22.7% below list).
• It's been on market 55 days — a 3% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $224k (22.7% below list) — sets the bar for 1% rule.
• 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: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Cromwell School District (suburban): math 51% / reading 58% proficiency, ranked #63 of 153 in CT (top 41%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: 58 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 278 units permitted in Lower Connecticut River Valley Planning Region in 2024 (89 in 5+ unit buildings).
• Current owner paid $151k; list at $290k implies a 92% 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→15/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?
• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• 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.