1312 Bigger St

Gary, IN 46404

$205,000C-

3 bd · 2.5 ba · 2,500 sqft · Built 1966 · SingleFamily · Active · 119 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,862/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$245
• HOA: −$0
• Vac / Maint / Mgmt: −$391
• Net cashflow: $151/mo
• Annual: $1,814/yr
• Cap rate: 7.18%
• Cash-on-cash: 3.16%
• DSCR: 1.14
• 1% rule: 0.91%
• Cash to close: $57,400

Investor read

• This is a 3-bed/2.5-bath single-family listed at $205k.
• At list price, monthly cash flow is $151 ($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 $186k (9.2% below list).
• It's been on market 119 days — a 9% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $186k (9.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#105 in IN) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools F, crime F, employment F.
• Gary Community School Corporation (urban): math 3% / reading 11% proficiency, ranked #299 of 301 in IN (top 99%) — 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.
• Market conditions: Rents rising fast (+11.6%/yr); 67 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 9y ago; this cycle's ask has dropped $45k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $135k; list at $205k implies a 52% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $57k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.2% vs local median 9.1% in Gary — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $1,862/mo this rent would consume 53% of the median local household income ($42k/yr) (locally 800% 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 119 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1966 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.