54 Washington St

Middletown, CT 06457

$935,000D

342 bd · 324.0 ba · 12,288 sqft · Built 1936 · MultiFamily · Active · 253 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $43,753/mo
• Mortgage (P&I): −$4,903
• Tax + insurance: −$1,558
• HOA: −$0
• Vac / Maint / Mgmt: −$9,188
• Net cashflow: $28,103/mo
• Annual: $337,240/yr
• Cap rate: 42.36%
• Cash-on-cash: 128.82%
• DSCR: 6.73
• 1% rule: 4.68%
• Cash to close: $261,800

Investor read

• This is a 18 × 19-bed/18.0-bath units multifamily listed at $935k. Condition is rated poor.
• At list price, monthly cash flow is $28k ($337k/yr) — positive. Per door: $2k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($44k rent vs $935k).
• It's been on market 253 days — a 12% lower offer ($823k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $823k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $28k 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.
• Watch-outs: built in 1936 — 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).
• 2 sale attempts; this cycle's ask has dropped $605k (39%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.2% rent growth), your $262k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 42.4% 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 $43,753/mo this rent would consume 661% 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

• It's been on market 253 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1936 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?

Repairs flagged (vision-AI assessment)

• Major: roof — Significant wear and tear
• Major: exterior walls — Significant wear and tear
• Major: flooring — Appears to be in poor condition
• Major: interior walls/paint — Paint appears chipped and peeling
• Major: HVAC/mechanicals — No visible systems, likely outdated