26 Rosemary St

New London, CT 06320

$409,900C

5 bd · 3.0 ba · 2,557 sqft · Built 1890 · MultiFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,037/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$514
• HOA: −$0
• Vac / Maint / Mgmt: −$1,058
• Net cashflow: $1,316/mo
• Annual: $15,788/yr
• Cap rate: 10.14%
• Cash-on-cash: 13.76%
• DSCR: 1.61
• 1% rule: 1.23%
• Cash to close: $114,772

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $410k.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $439/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $410k).
• It's been on market 38 days — a 3% lower offer ($398k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $398k (3.0% below list) — sets the bar for market timing.
• 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 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+, schools F, amenities 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.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 69 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 2 sale attempts since 14y ago; this cycle's ask has dropped $40k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 10.1% vs local median 4.3% 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.
• At $5,037/mo this rent would consume 102% of the median local household income ($59k/yr) (locally 2014% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 38 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• 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 1890 — 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.