501 minnesota Ave

Ontonagon, MI 49953

$39,900B-

2 bd · 1.0 ba · 815 sqft · Built 1900 · SingleFamily · Pending · 665 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $860/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$148
• HOA: −$0
• Vac / Maint / Mgmt: −$181
• Net cashflow: $322/mo
• Annual: $3,869/yr
• Cap rate: 15.99%
• Cash-on-cash: 34.63%
• DSCR: 2.54
• 1% rule: 2.16%
• Cash to close: $11,172

Investor read

• This is a 2-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $322 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($860 rent vs $40k).
• It's been on market 665 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• In year one you build about $1k of equity ($276 loan paydown + $1k appreciation (2.7% local appreciation)).
• Location reads 76/100 on livability (#143 in MI, #3,663 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools D, amenities F, commute F.
• Ontonagon Area School District (rural): math 25% / reading 45% proficiency, ranked #474 of 760 in MI (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.9% of price; built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 33 active listings in the ZIP; 13 units permitted in Ontonagon County in 2024 (0 in 5+ unit buildings).
• Ontonagon County population projected at -63% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 9y ago; this cycle's ask has dropped $30k (43%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $9k; list at $40k implies a 343% gain — meaningful room to come down on a strong offer.
• At projected returns (2.7% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~3 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 665 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.