1561 Route 12

Gales Ferry, CT 06335

$405,000C-

4 bd · 2.5 ba · 2,003 sqft · Built 1962 · SingleFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,900/mo
• Mortgage (P&I): −$2,124
• Tax + insurance: −$593
• HOA: −$0
• Vac / Maint / Mgmt: −$819
• Net cashflow: $364/mo
• Annual: $4,371/yr
• Cap rate: 7.37%
• Cash-on-cash: 3.85%
• DSCR: 1.17
• 1% rule: 0.96%
• Cash to close: $113,400

Investor read

• This is a 4-bed/2.5-bath single-family listed at $405k.
• At list price, monthly cash flow is $364 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $390k (3.7% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $390k (3.7% 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 $12k 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: Gales Ferry School (231 students, 13% FRL); Ledyard High School (math 42% / reading 67%, grade C-, #63 of 194 statewide, top 39%, 743 students, 25% FRL) — zoned schools at 19% FRL track the district average.
• Zoned-school proficiency averages 54% at this address vs 42% district-wide (+13 pts) — the actual schools serving this property are materially stronger than the Ledyard School District average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: 31 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 8 sale attempts since 20y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $225k; list at $405k implies a 80% 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 7.4% vs local median 5.1% in Gales Ferry — 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.

Questions for listing agent

• Built in 1962 — 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?
• 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.