7801 E Michigan Ave

Michigan Center, MI 49201

$85,000B

2 bd · 1.0 ba · 721 sqft · Built 1940 · SingleFamily · Active · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $995/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$68
• HOA: −$0
• Vac / Maint / Mgmt: −$209
• Net cashflow: $273/mo
• Annual: $3,274/yr
• Cap rate: 10.14%
• Cash-on-cash: 13.75%
• DSCR: 1.61
• 1% rule: 1.17%
• Cash to close: $23,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $85k.
• At list price, monthly cash flow is $273 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($995 rent vs $85k).
• It's been on market 42 days — a 3% lower offer ($82k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $82k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#314 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: employment C-, schools F, amenities F.
• Michigan Center School District (suburban): math 19% / reading 37% proficiency, ranked #387 of 540 in MI (top 72%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+10.3%/yr); 362 active listings in the ZIP; 317 units permitted in Jackson County in 2024 (103 in 5+ unit buildings).
• Jackson County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 2y ago; this cycle's ask has dropped $5k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $24k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 10.1% vs local median 3.0% in Michigan Center — 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.
• This rent is only 16% of the median local income ($74k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 42 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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 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?
• 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.