8171 Denwood Dr Unit K-3

Sterling Heights, MI 48312

$85,000C-

1 bd · 1.0 ba · 761 sqft · Built 1965 · Condo · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,187/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$172
• HOA: −$221
• Vac / Maint / Mgmt: −$249
• Net cashflow: $99/mo
• Annual: $1,185/yr
• Cap rate: 7.69%
• Cash-on-cash: 4.98%
• DSCR: 1.22
• 1% rule: 1.40%
• Cash to close: $23,800

Investor read

• This is a 1-bed/1.0-bath condo listed at $85k.
• At list price, monthly cash flow is $99 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $85k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• 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 74/100 on livability (#173 in MI, #4,545 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools C-, health & safety D+, amenities F.
• Warren Consolidated Schools (urban): math 18% / reading 39% proficiency, ranked #373 of 540 in MI (top 69%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 159 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 4 sale attempts since 2y 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.
• Cap rate 7.7% vs local median 3.8% in Sterling Heights — 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

• Built in 1965 — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.