Officers were called shortly before 2am to Stafford Road, Brighton.
They forced the front door to reach the victim, who had multiple wounds to his head and chest.
Meanwhile two suspects fled the scene via the rear of the property.
It sparked a manhunt in the gardens behind the terraced homes between Stafford Road and Exeter Street.
By 2.30am, police were knocking on doors to demand access to rear gardens, while a helicopter circled overhead.
One resident said: “I looked out of the window and saw a man crawling along my garden wall.
“Police found him and said he needed to put his hands where they could see them.
“They asked him whether he had a weapon, and threatened to Taser or spray him if he did not comply.”
Video footage from the scene revealed the moment one suspect was arrested.
Officers told him he was under arrest on suspicion of attempted murder.
The victim was taken to the Royal Sussex County Hospital, where he was then pronounced dead at 3.50am.
At 9am, the police issued a media appeal over the incident.
The force confirmed a 44-year-old man and a 45-year-old man had been arrested and were in custody.
Stafford Road was cordoned off and through traffic was blocked.
Officers stood guard outside the ground floor flat, while community support officers were posted at each end of the road.
Meanwhile police were also posted outside an address in nearby Exeter Street.
At 11am, a scene of crime officer (SOCO) arrived in white overalls to continue forensic tests.
Then at 2pm, Brighton Police commander Nick May posted an appeal to help identify the victim and said it was a tragic incident.
Chief Superintendent May said: “We urgently want to identify this man and ensure his family are informed in a proper way.”
Anyone with information is asked to contact the force online or call 101 and quote Operation Barnfield.