860 Long Cove Rd

Gales Ferry, CT 06335

$374,900F

2 bd · 2.0 ba · 1,566 sqft · Built 1958 · SingleFamily · Under Contract · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,339/mo
• Mortgage (P&I): −$1,966
• Tax + insurance: −$612
• HOA: −$0
• Vac / Maint / Mgmt: −$491
• Net cashflow: $-730/mo
• Annual: $-8,764/yr
• Cap rate: 3.96%
• Cash-on-cash: -8.35%
• DSCR: 0.63
• 1% rule: 0.62%
• Cash to close: $104,972

Investor read

• This is a 2-bed/2.0-bath single-family listed at $375k.
• At list price, monthly cash flow is $-730 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $246k (34.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $234k (37.6% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $234k (37.6% below list) — sets the bar for 1% rule.
• 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 78/100 on livability (#40 in CT, #2,751 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living D+, amenities F, commute F.
• Ledyard School District (rural): math 34% / reading 49% proficiency, ranked #92 of 153 in CT (top 60%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 15% free/reduced lunch — higher-income household profile.
• Zoned schools: Juliet W. Long School (math 33% / reading 47%, grade F, #296 of 553 statewide, top 54%, 273 students, 18% FRL); Ledyard Middle School (math 28% / reading 43%, grade F, #120 of 175 statewide, top 70%, 534 students, 27% FRL); Ledyard High School (math 42% / reading 67%, grade C-, #63 of 194 statewide, top 39%, 743 students, 25% FRL).
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 29 active listings in the ZIP; 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• Current owner paid $114k; list at $375k implies a 230% gain — meaningful room to come down on a strong offer.
• 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 4.0% vs local median 5.1% in Gales Ferry — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1958 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.