840 Worthington Rdg

Berlin, CT 06037

$549,500D

4 bd · 2.5 ba · 3,468 sqft · Built 1830 · MultiFamily · Under Contract · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,127/mo
• Mortgage (P&I): −$2,882
• Tax + insurance: −$965
• HOA: −$0
• Vac / Maint / Mgmt: −$1,077
• Net cashflow: $203/mo
• Annual: $2,441/yr
• Cap rate: 6.74%
• Cash-on-cash: 1.59%
• DSCR: 1.07
• 1% rule: 0.93%
• Cash to close: $153,860

Investor read

• This is a 4-bed/2.5-bath multifamily listed at $550k.
• At list price, monthly cash flow is $203 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $513k (6.7% below list).
• It's been on market 25 days — a 2% lower offer ($541k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $513k (6.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Berlin School District (suburban): math 47% / reading 58% proficiency, ranked #69 of 153 in CT (top 45%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Zoned schools: Emma Hart Willard School (math 47% / reading 57%, grade C-, #213 of 553 statewide, top 41%, 437 students, 32% FRL); Catherine M. Mcgee Middle School (math 44% / reading 53%, grade C-, #84 of 175 statewide, top 49%, 582 students, 22% FRL); Berlin High School (math 38% / reading 69%, grade C-, #78 of 194 statewide, top 40%, 858 students, 18% FRL).
• Watch-outs: built in 1830 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 62 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 4 sale attempts since 21y 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.
• 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.
• At $5,127/mo this rent would consume 53% of the median local household income ($116k/yr) (locally 294% 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 1830 — 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.
• 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.