419 Prospect #203

Romeo, MI 48065

$79,900D

1 bd · 1.0 ba · 600 sqft · Built 1966 · Condo · Pending · 243 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,097/mo
• Mortgage (P&I): −$419
• Tax + insurance: −$133
• HOA: −$375
• Vac / Maint / Mgmt: −$230
• Net cashflow: $-60/mo
• Annual: $-723/yr
• Cap rate: 5.39%
• Cash-on-cash: -3.23%
• DSCR: 0.86
• 1% rule: 1.37%
• Cash to close: $22,372

Investor read

• This is a 1-bed/1.0-bath condo listed at $80k.
• At list price, monthly cash flow is $-60 ($-723/yr) — negative.
• To cash-flow at today's rent, offer at most $71k (10.9% below list).
• Meets the 1% rule at list price ($1k rent vs $80k).
• It's been on market 243 days — a 12% lower offer ($70k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $70k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $552 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#497 in MI) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Romeo Community Schools (suburban): math 43% / reading 51% proficiency, ranked #102 of 540 in MI (top 19%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 34% of rent.
• Market conditions: 87 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,321 units permitted in Macomb County in 2024 (86 in 5+ unit buildings).
• Macomb County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 12 sale attempts since 12y 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 $48k; list at $80k implies a 66% gain — meaningful room to come down on a strong offer.
• Cap rate 5.4% vs local median 0.9% in Romeo — 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.

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 243 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1966 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• 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?