2 Laurel Dr

Old Saybrook Center, CT 06441

$399,900D

2 bd · 2.5 ba · 1,440 sqft · Built 1985 · Condo · Under Contract · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,500/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$459
• HOA: −$726
• Vac / Maint / Mgmt: −$735
• Net cashflow: $-517/mo
• Annual: $-6,210/yr
• Cap rate: 4.74%
• Cash-on-cash: -5.55%
• DSCR: 0.75
• 1% rule: 0.88%
• Cash to close: $111,972

Investor read

• This is a 2-bed/2.5-bath condo listed at $400k.
• At list price, monthly cash flow is $-517 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $308k (22.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $350k (12.5% below list).
• It's been on market 31 days — a 3% lower offer ($388k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $308k (22.9% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#135 in CT) — a middle-class / working-renter tenant base. Strengths: crime A+; Watch: amenities F, commute F, cost of living F.
• Regional School District 18 (rural): math 67% / reading 76% proficiency, ranked #16 of 153 in CT (top 10%) — strong family-tenant draw, lease renewals of 3-5y typical; only 7% free/reduced lunch — higher-income household profile.
• Zoned schools: Lyme-Old Lyme Middle School (math 58% / reading 72%, grade A-, #29 of 175 statewide, top 17%, 270 students, 13% FRL); Lyme-Old Lyme High School (math 67% / reading 77%, grade B+, #14 of 194 statewide, top 8%, 407 students, 12% FRL).
• Watch-outs: HOA is 21% of rent.
• Market conditions: 18 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 278 units permitted in Lower Connecticut River Valley Planning Region in 2024 (89 in 5+ unit buildings).
• Cap rate 4.7% vs local median 2.2% in Old Saybrook Center — 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.

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 31 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• Schools are A-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?
• 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.