20882 Hawthorne St

Harper Woods, MI 48225

$130,000B

2 bd · 1.0 ba · 1,053 sqft · Built 1949 · SingleFamily · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,556/mo
• Mortgage (P&I): −$682
• Tax + insurance: −$209
• HOA: −$0
• Vac / Maint / Mgmt: −$327
• Net cashflow: $338/mo
• Annual: $4,058/yr
• Cap rate: 9.41%
• Cash-on-cash: 11.15%
• DSCR: 1.50
• 1% rule: 1.20%
• Cash to close: $36,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $338 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $130k).
• It's been on market 26 days — a 2% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $128k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $899 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#199 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D+, health & safety D+, schools D-.
• Grosse Pointe Public Schools (suburban): math 56% / reading 68% proficiency, ranked #24 of 540 in MI (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 134 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); 2,639 units permitted in Wayne County in 2024 (1,216 in 5+ unit buildings).
• Wayne County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 18y 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 $31k; list at $130k implies a 319% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.1% rent growth), your $36k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 9.4% vs local median 7.7% in Harper Woods — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 30% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1949 — 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.
• 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?
• 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.