74 Johnson St

Middletown, CT 06457

$375,000C-

5 bd · 2.5 ba · 2,848 sqft · Built 1948 · MultiFamily · Under Contract · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,848/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$622
• HOA: −$0
• Vac / Maint / Mgmt: −$808
• Net cashflow: $451/mo
• Annual: $5,417/yr
• Cap rate: 7.74%
• Cash-on-cash: 5.16%
• DSCR: 1.23
• 1% rule: 1.03%
• Cash to close: $105,000

Investor read

• This is a 5-bed/2.5-bath multifamily listed at $375k.
• At list price, monthly cash flow is $451 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $375k).
• Only 3 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 $11k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#17 in CT, #1,390 nationally) — a professional / high-income tenant draw. Strengths: crime A+, amenities A+, health & safety A+; Watch: commute F.
• Middletown School District (urban): math 24% / reading 44% proficiency, ranked #113 of 153 in CT (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Middletown High School (math 25% / reading 52%, grade F, #111 of 194 statewide, top 57%, 1,214 students, 49% FRL).
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 143 active listings in the ZIP; solid renter incomes; 278 units permitted in Lower Connecticut River Valley Planning Region in 2024 (89 in 5+ unit buildings).
• 10 sale attempts since 20y ago; this cycle's ask is 72% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $225k; list at $375k implies a 67% gain — meaningful room to come down on a strong offer.
• Cap rate 7.7% vs local median 3.7% in Middletown — 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 $3,848/mo this rent would consume 58% of the median local household income ($79k/yr) (locally 2196% 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 1948 — 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.
• 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.