606 Southworth Ter

Kalamazoo, MI 49048

$141,500D-

2 bd · 1.0 ba · 947 sqft · Built 2023 · Townhouse · Active · 130 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,167/mo
• Mortgage (P&I): −$742
• Tax + insurance: −$236
• HOA: −$118
• Vac / Maint / Mgmt: −$245
• Net cashflow: $-174/mo
• Annual: $-2,085/yr
• Cap rate: 4.82%
• Cash-on-cash: -5.26%
• DSCR: 0.77
• 1% rule: 0.82%
• Cash to close: $39,620

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $142k. Condition is rated excellent.
• At list price, monthly cash flow is $-174 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $116k (17.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $117k (17.5% below list).
• It's been on market 130 days — a 12% lower offer ($125k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (17.8% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $978 of loan paydown is wiped out by about $4k 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.
• Zoned schools: Spring Valley Center For Exploration (281 students, 92% FRL); Linden Grove Middle School (math 30% / reading 70%, grade C, #125 of 493 statewide, top 25%, 705 students, 69% FRL); Kalamazoo Central High School (math 42% / reading 67%, grade C-, #109 of 713 statewide, top 17%, 1,612 students, 64% FRL).
• Market conditions: Rents rising fast (+7.9%/yr); 207 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals lingering (median 70d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 9 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.

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 130 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.