1136 Connecticut St

Gary, IN 46407

$80,000D-

8 bd · 4.0 ba · 4,311 sqft · Built 1927 · MultiFamily · Pending · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,470/mo
• Mortgage (P&I): −$420
• Tax + insurance: −$129
• HOA: −$0
• Vac / Maint / Mgmt: −$939
• Net cashflow: $2,982/mo
• Annual: $35,790/yr
• Cap rate: 51.03%
• Cash-on-cash: 159.78%
• DSCR: 8.11
• 1% rule: 5.59%
• Cash to close: $22,400

Investor read

• This is a 1×3bd/1ba + 2×2bd/1ba + 1×1bd/1ba units multifamily listed at $80k.
• At list price, monthly cash flow is $3k ($36k/yr) — positive. Per door: $746/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $80k).
• It's been on market 55 days — a 3% lower offer ($78k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $78k (3.0% below list) — sets the bar for market timing.
• In year one you build about $1k of equity ($553 loan paydown + $784 appreciation (1.0% local appreciation)).
• Location reads 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1927 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 121 active listings in the ZIP; lower-income renter base — watch delinquency; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (1.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 51.0% vs local median 9.1% in Gary — 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 $4,470/mo this rent would consume 188% of the median local household income ($29k/yr) (locally 392% 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 55 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 1927 — 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 F 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?