26 Magnolia St

New Britain, CT 06053

$419,900D

4 bd · 2.0 ba · 1,600 sqft · Built 1926 · MultiFamily · Under Contract · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,184/mo
• Mortgage (P&I): −$2,202
• Tax + insurance: −$744
• HOA: −$0
• Vac / Maint / Mgmt: −$669
• Net cashflow: $-430/mo
• Annual: $-5,163/yr
• Cap rate: 5.06%
• Cash-on-cash: -4.39%
• DSCR: 0.80
• 1% rule: 0.76%
• Cash to close: $117,572

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $420k.
• At list price, monthly cash flow is $-430 ($-5k/yr) — negative. Per door: $-215/mo.
• To cash-flow at today's rent, offer at most $344k (18.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $318k (24.2% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $318k (24.2% below list) — sets the bar for 1% rule.
• In year one you build about $45k of equity ($3k loan paydown + $42k appreciation (10.0% local appreciation)).
• Location reads 74/100 on livability (#67 in CT, #4,936 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living A, housing A; Watch: crime D, employment D, schools F.
• New Britain School District (suburban): math 6% / reading 17% proficiency, ranked #153 of 153 in CT (top 100%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 71% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1926 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.9%/yr); 69 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 1,867 units permitted in Capitol Planning Region in 2024 (1,399 in 5+ unit buildings).
• 2 sale attempts 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 $241k; list at $420k implies a 74% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$72k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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.
• At $3,184/mo this rent would consume 61% of the median local household income ($63k/yr) (locally 1835% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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 1926 — 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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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?