2212 S Michigan St

South Bend, IN 46613

$129,900B-

15 bd · 12.0 ba · 4,896 sqft · Built 1890 · MultiFamily · Pending · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,057/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$643
• HOA: −$0
• Vac / Maint / Mgmt: −$1,062
• Net cashflow: $2,671/mo
• Annual: $32,049/yr
• Cap rate: 34.91%
• Cash-on-cash: 102.19%
• DSCR: 5.55
• 1% rule: 3.89%
• Cash to close: $36,372

Investor read

• This is a 3 × 5-bed/?-bath units multifamily listed at $130k. Condition is rated fair.
• At list price, monthly cash flow is $3k ($32k/yr) — positive. Per door: $890/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $130k).
• It's been on market 62 days — a 6% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, schools F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $427/mo; built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.1%/yr); 77 active listings in the ZIP; lower-income renter base — watch delinquency; 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• 4 sale attempts since 5y ago; this cycle's ask has dropped $15k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $36k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 34.9% vs local median 4.4% in South Bend — 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 $5,057/mo this rent would consume 143% of the median local household income ($43k/yr) (locally 545% 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 62 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1890 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.

Repairs flagged (vision-AI assessment)

• Major: Kitchen cabinets — The kitchen cabinets are visibly damaged and need to be replaced.
• Major: Bathroom fixtures — The bathroom fixtures are in poor condition and need to be replaced.
• Major: Exterior siding — The exterior siding is peeling and damaged, requiring replacement.
• Major: Windows — The windows are in poor condition and need to be replaced or repaired.