502 Harmon St

Detroit, MI 48202

$194,900D

7 bd · 2.5 ba · 2,596 sqft · Built 1913 · Townhouse · Active · 166 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,961/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$170
• HOA: −$0
• Vac / Maint / Mgmt: −$412
• Net cashflow: $357/mo
• Annual: $4,284/yr
• Cap rate: 8.49%
• Cash-on-cash: 7.85%
• DSCR: 1.35
• 1% rule: 1.01%
• Cash to close: $54,572

Investor read

• This is a 7-bed/2.5-bath townhouse listed at $195k.
• At list price, monthly cash flow is $357 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 166 days — a 12% lower offer ($172k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $172k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k 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: 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.
• Zoned schools: Golightly Education Center (math 24% / reading 24%, grade F, #980 of 1,397 statewide, top 74%, 351 students, 81% FRL); Southeastern High School (math 5% / reading 15%, grade F, #659 of 713 statewide, top 97%, 644 students, 87% FRL).
• Watch-outs: built in 1913 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-5.1%/yr); 257 active listings in the ZIP; 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.
• 6 sale attempts since 7y ago; this cycle's ask has dropped $50k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $56k; list at $195k implies a 248% gain — meaningful room to come down on a strong offer.
• At $1,961/mo this rent would consume 54% of the median local household income ($44k/yr) (locally 1258% 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 166 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1913 — 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.