3 Arch St

Danbury, CT 06811

$599,000C+

5 bd · 3.0 ba · 2,556 sqft · Built 1951 · MultiFamily · Active · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,861/mo
• Mortgage (P&I): −$3,141
• Tax + insurance: −$858
• HOA: −$0
• Vac / Maint / Mgmt: −$1,441
• Net cashflow: $1,421/mo
• Annual: $17,051/yr
• Cap rate: 9.14%
• Cash-on-cash: 10.17%
• DSCR: 1.45
• 1% rule: 1.15%
• Cash to close: $167,720

Investor read

• This is a 5-bed/3.0-bath multifamily listed at $599k.
• At list price, monthly cash flow is $1k ($17k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $599k).
• It's been on market 40 days — a 3% lower offer ($581k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $581k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#51 in CT, #3,379 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A+; Watch: amenities F, cost of living F.
• Danbury School District (urban): math 19% / reading 32% proficiency, ranked #131 of 153 in CT (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Danbury High School (math 19% / reading 41%, grade F, #137 of 194 statewide, top 70%, 3,590 students, 48% FRL).
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 117 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 1,151 units permitted in Western Connecticut Planning Region in 2024 (714 in 5+ unit buildings).
• Climate carrying-cost: moderate wind risk, 26% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.1% vs local median 3.4% in Danbury — 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 $6,861/mo this rent would consume 79% of the median local household income ($105k/yr) (locally 551% 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 40 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1951 — 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 D-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.
• 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.