842 Hall St SE

Grand Rapids, MI 49507

$295,000C-

5 bd · 2.0 ba · 1,596 sqft · Built 1910 · SingleFamily · Active · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,455/mo
• Mortgage (P&I): −$1,547
• Tax + insurance: −$240
• HOA: −$0
• Vac / Maint / Mgmt: −$516
• Net cashflow: $152/mo
• Annual: $1,828/yr
• Cap rate: 6.91%
• Cash-on-cash: 2.21%
• DSCR: 1.10
• 1% rule: 0.83%
• Cash to close: $82,600

Investor read

• This is a 5-bed/2.0-bath single-family listed at $295k.
• At list price, monthly cash flow is $152 ($2k/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 $245k (16.8% below list).
• It's been on market 52 days — a 3% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $245k (16.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#44 in MI, #939 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment C-, crime F.
• Grand Rapids Public Schools (urban): math 15% / reading 29% proficiency, ranked #451 of 540 in MI (top 84%) — 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 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 178 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,253 units permitted in Kent County in 2024 (969 in 5+ unit buildings).
• Kent County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 27y ago; this cycle's ask has dropped $32k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $80k; list at $295k implies a 271% gain — meaningful room to come down on a strong offer.
• Cap rate 6.9% vs local median 4.5% in Grand Rapids — 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 $2,455/mo this rent would consume 48% of the median local household income ($61k/yr) (locally 1625% 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 52 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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.
• 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?
• 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.