18 E Montgomery St

Hillsdale, MI 49242

$149,900D

3 bd · 1.0 ba · 1,488 sqft · Built 1946 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,331/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$197
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $68/mo
• Annual: $821/yr
• Cap rate: 6.84%
• Cash-on-cash: 1.96%
• DSCR: 1.09
• 1% rule: 0.89%
• Cash to close: $41,972

Investor read

• This is a 3-bed/1.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $68 ($821/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 $133k (11.2% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $133k (11.2% 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 $4k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#158 in MI, #4,063 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, commute F.
• Hillsdale Community Schools (town): math 26% / reading 38% proficiency, ranked #348 of 540 in MI (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Gier Elementary School (math 27% / reading 27%, grade F, #923 of 1,397 statewide, top 69%, 454 students, 60% FRL); Davis Middle School (math 25% / reading 41%, grade F, #306 of 493 statewide, top 63%, 359 students, 52% FRL); Hillsdale High School (math 32% / reading 52%, grade F, #264 of 713 statewide, top 41%, 400 students, 46% FRL) — zoned schools at 53% FRL track the district average.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 80 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 72 units permitted in Hillsdale County in 2024 (0 in 5+ unit buildings).
• Hillsdale County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 10 sale attempts since 13y 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 $86k; list at $150k implies a 75% gain — meaningful room to come down on a strong offer.
• Cap rate 6.8% vs local median 2.7% in Hillsdale — 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

• Built in 1946 — 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.