146 Union St

Manchester, CT 06042

$419,900C

6 bd · 2.0 ba · 2,520 sqft · Built 1962 · MultiFamily · Under Contract · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,740/mo
• Mortgage (P&I): −$2,202
• Tax + insurance: −$788
• HOA: −$0
• Vac / Maint / Mgmt: −$995
• Net cashflow: $754/mo
• Annual: $9,053/yr
• Cap rate: 8.45%
• Cash-on-cash: 7.70%
• DSCR: 1.34
• 1% rule: 1.13%
• Cash to close: $117,572

Investor read

• This is a 2 × 3-bed/1.8-bath units multifamily listed at $420k.
• At list price, monthly cash flow is $754 ($9k/yr) — positive. Per door: $377/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $420k).
• 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 (#59 in CT, #3,580 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A-; Watch: amenities D, commute F.
• Manchester School District (suburban): math 21% / reading 32% proficiency, ranked #130 of 153 in CT (top 85%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Waddell School (math 37% / reading 37%, grade F, #318 of 553 statewide, top 60%, 461 students, 53% FRL); Illing Middle School (math 18% / reading 35%, grade F, #151 of 175 statewide, top 87%, 846 students, 58% FRL); Manchester High School (math 26% / reading 47%, grade F, #118 of 194 statewide, top 61%, 1,673 students, 52% FRL).
• Market conditions: Rents rising fast (+4.8%/yr); 58 active listings in the ZIP; solid renter incomes; 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 3 sale attempts since 15y 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.
• Current owner paid $226k; list at $420k implies a 86% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.8% rent growth), your $118k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% 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 8.4% vs local median 3.7% in Manchester — 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 $4,740/mo this rent would consume 62% of the median local household income ($92k/yr) (locally 730% 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 1962 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.