1408 Lee Pl

Detroit, MI 48206

$399,000D-

1247 bd · 841.0 ba · 19,686 sqft · Built 1924 · MultiFamily · Active · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $31,276/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$665
• HOA: −$0
• Vac / Maint / Mgmt: −$6,568
• Net cashflow: $21,951/mo
• Annual: $263,408/yr
• Cap rate: 72.31%
• Cash-on-cash: 235.77%
• DSCR: 11.49
• 1% rule: 7.84%
• Cash to close: $111,720

Investor read

• This is a 15×1bd/1ba + 14×2bd/1ba units multifamily listed at $399k.
• At list price, monthly cash flow is $22k ($263k/yr) — positive. Per door: $757/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($31k rent vs $399k).
• It's been on market 79 days — a 6% lower offer ($375k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $375k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#218 in MI) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools F, crime F, employment F.
• Detroit Public Schools Community District (urban): math 10% / reading 24% proficiency, ranked #499 of 540 in MI (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 90% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1924 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.2%/yr); 271 active listings in the ZIP; 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.
• 4 sale attempts since 6y ago; this cycle's ask has dropped $21k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 5.2% rent growth), your $112k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 72.3% vs local median 10.2% in Detroit — 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.
• At $31,276/mo this rent would consume 833% of the median local household income ($45k/yr) (locally 646% 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 79 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1924 — 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?