1406 Reo Ave

Lansing, MI 48910

$55,000B+

2 bd · 1.0 ba · 864 sqft · Built 1909 · SingleFamily · Active · 82 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,133/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $455/mo
• Annual: $5,458/yr
• Cap rate: 16.22%
• Cash-on-cash: 35.44%
• DSCR: 2.58
• 1% rule: 2.06%
• Cash to close: $15,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $55k. Condition is rated fair.
• At list price, monthly cash flow is $455 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $55k).
• It's been on market 82 days — a 6% lower offer ($52k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $52k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#94 in MI, #2,182 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D, crime F.
• Lansing Public School District (urban): math 14% / reading 23% proficiency, ranked #650 of 760 in MI (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Pattengill School (600 students, 88% FRL) — zoned schools average 88% FRL vs 68% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.8% of price; built in 1909 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 303 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 110d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 350 units permitted in Ingham County in 2024 (186 in 5+ unit buildings).
• Ingham County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts 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.
• At projected returns (-3.0% appreciation + 4.7% rent growth), your $15k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 16.2% vs local median 5.9% in Lansing — 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

• It's been on market 82 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1909 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?

Repairs flagged (vision-AI assessment)

• Major: Exposed subfloor in kitchen and bath — Structural damage
• Major: Exposed subfloor in kitchen and bath — Structural damage
• Major: Exposed subfloor in kitchen and bath — Structural damage
• Major: Exposed subfloor in kitchen and bath — Structural damage
• Major: Exposed subfloor in kitchen and bath — Structural damage
• Major: Exposed subfloor in kitchen and bath — Structural damage