Coastal Cottage Plan

Michigan City, IN 46360

$94,500F

3 bd · 2.0 ba · 1,125 sqft · Built — · Manufactured · Active · 533 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,262/mo
• Mortgage (P&I): −$859
• Tax + insurance: −$273
• HOA: −$575
• Vac / Maint / Mgmt: −$265
• Net cashflow: $-710/mo
• Annual: $-8,516/yr
• Cap rate: 1.09%
• Cash-on-cash: -18.57%
• DSCR: 0.17
• 1% rule: 0.77%
• Cash to close: $45,860

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $94k. Condition is rated excellent.
• At list price, monthly cash flow is $-710 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $61k (35.4% below list).
• Meets the 1% rule at list price ($1k rent vs $94k).
• It's been on market 533 days — a 12% lower offer ($83k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $61k (35.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#15 in IN, #1,317 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D, amenities D-.
• Michigan City Area Schools (urban): math 23% / reading 28% proficiency, ranked #262 of 301 in IN (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Joy Elementary School (math 22% / reading 22%, grade F, #790 of 994 statewide, top 81%, 460 students, 78% FRL); Martin T Krueger Middle School (math 14% / reading 17%, grade F, #293 of 330 statewide, top 90%, 333 students, 84% FRL); Michigan City High School (math 17% / reading 37%, grade F, #315 of 369 statewide, top 86%, 1,555 students, 71% FRL).
• Watch-outs: property tax is 2.6% of price; HOA is 46% of rent.
• Market conditions: Rents rising fast (+9.7%/yr); 648 active listings in the ZIP; 216 units permitted in LaPorte County in 2024 (75 in 5+ unit buildings).
• LaPorte County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 1.1% vs local median 4.2% in Michigan City — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 533 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.
• 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?
• 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?