227 Montauk Ave

New London, CT 06320

$179,900B-

4 bd · 1.5 ba · 1,430 sqft · Built 1900 · SingleFamily · Under Contract · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,196/mo
• Mortgage (P&I): −$943
• Tax + insurance: −$416
• HOA: −$0
• Vac / Maint / Mgmt: −$461
• Net cashflow: $375/mo
• Annual: $4,497/yr
• Cap rate: 8.79%
• Cash-on-cash: 8.93%
• DSCR: 1.40
• 1% rule: 1.22%
• Cash to close: $50,372

Investor read

• This is a 4-bed/1.5-bath single-family listed at $180k.
• At list price, monthly cash flow is $375 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $180k).
• 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 $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#66 in CT, #4,772 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, housing A-, crime B+; Watch: employment D+, amenities F, commute F.
• New London School District (urban): math 11% / reading 21% proficiency, ranked #149 of 153 in CT (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: New London High School (math 2% / reading 12%, grade F, #188 of 194 statewide, top 98%, 532 students, 93% FRL) — zoned schools average 93% FRL vs 72% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 67 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• Current owner paid $68k; list at $180k implies a 165% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wind risk, 80% 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 8.8% vs local median 4.5% in New London — 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.
• This rent runs 45% of the median local income ($59k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1900 — 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 F-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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.