800 W South St

Kalamazoo, MI 49007

$855,000B

64 bd · 1.0 ba · 4,952 sqft · Built 1927 · MultiFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,466/mo
• Mortgage (P&I): −$4,484
• Tax + insurance: −$1,060
• HOA: −$0
• Vac / Maint / Mgmt: −$2,618
• Net cashflow: $4,304/mo
• Annual: $51,652/yr
• Cap rate: 12.33%
• Cash-on-cash: 21.58%
• DSCR: 1.96
• 1% rule: 1.46%
• Cash to close: $239,400

Investor read

• This is a 8 × 8-bed/7.0-bath units multifamily listed at $855k.
• At list price, monthly cash flow is $4k ($52k/yr) — positive. Per door: $538/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($12k rent vs $855k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#141 in MI, #3,492 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Kalamazoo Public Schools (urban): math 43% / reading 72% proficiency, ranked #71 of 540 in MI (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1927 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.8%/yr); 77 active listings in the ZIP; lower-income renter base — watch delinquency; 339 units permitted in Kalamazoo County in 2024 (22 in 5+ unit buildings).
• Kalamazoo County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 24y 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 $285k; list at $855k implies a 200% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $239k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 12.3% vs local median 4.1% in Kalamazoo — 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 $12,466/mo this rent would consume 380% of the median local household income ($39k/yr) (locally 816% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1927 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.