8418 Brace St

Detroit, MI 48228

$17,400D

3 bd · 1.0 ba · 866 sqft · Built 1943 · SingleFamily · Pending · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,218/mo
• Mortgage (P&I): −$91
• Tax + insurance: −$29
• HOA: −$0
• Vac / Maint / Mgmt: −$256
• Net cashflow: $842/mo
• Annual: $10,106/yr
• Cap rate: 64.37%
• Cash-on-cash: 207.42%
• DSCR: 10.23
• 1% rule: 7.00%
• Cash to close: $4,872

Investor read

• This is a 3-bed/1.0-bath single-family listed at $17k.
• At list price, monthly cash flow is $842 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $17k).
• It's been on market 80 days — a 6% lower offer ($16k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $16k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $120 of loan paydown is wiped out by about $522 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 1943 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.3%/yr); 363 active listings in the ZIP; 38 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 61% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 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.
• 2 sale attempts; this cycle's ask has dropped $2k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $5k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 64.4% 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 $1,218/mo this rent would consume 48% of the median local household income ($31k/yr) (locally 4144% 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 80 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1943 — 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?
• 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.