15012 Island Dr

Sterling Heights, MI 48313

$120,000C

1 bd · 1.0 ba · 798 sqft · Built 1988 · Townhouse · Active · 151 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,376/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$200
• HOA: −$240
• Vac / Maint / Mgmt: −$289
• Net cashflow: $18/mo
• Annual: $213/yr
• Cap rate: 6.47%
• Cash-on-cash: 0.63%
• DSCR: 1.03
• 1% rule: 1.15%
• Cash to close: $33,600

Investor read

• This is a 1-bed/1.0-bath townhouse listed at $120k. Condition is rated good.
• At list price, monthly cash flow is $18 ($213/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $120k).
• It's been on market 151 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#173 in MI, #4,545 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety D+, amenities F.
• Utica Community Schools (suburban): math 38% / reading 53% proficiency, ranked #126 of 540 in MI (top 23%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Graebner Elementary School (math 28% / reading 42%, grade F, #735 of 1,397 statewide, top 53%, 549 students, 58% FRL); Bemis Junior High School (math 41% / reading 63%, grade C+, #95 of 493 statewide, top 20%, 805 students, 44% FRL); Henry Ford Ii High School (math 33% / reading 57%, grade D-, #211 of 713 statewide, top 30%, 1,717 students, 37% FRL) — zoned schools average 46% FRL vs 26% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.2%/yr); 177 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals lingering (median 86d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 59% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,321 units permitted in Macomb County in 2024 (86 in 5+ unit buildings).
• Macomb County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 17 sale attempts since 29y 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 $92k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.5% vs local median 4.0% in Sterling Heights — 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

• It's been on market 151 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.