5845 Miller Rd

Dearborn, MI 48126

$117,000B

2 bd · 1.0 ba · 918 sqft · Built 1931 · Townhouse · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,354/mo
• Mortgage (P&I): −$614
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$284
• Net cashflow: $304/mo
• Annual: $3,644/yr
• Cap rate: 9.41%
• Cash-on-cash: 11.12%
• DSCR: 1.49
• 1% rule: 1.16%
• Cash to close: $32,760

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $117k.
• At list price, monthly cash flow is $304 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $117k).
• It's been on market 20 days — a 2% lower offer ($115k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $809 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#84 in MI, #1,904 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities D, schools D-.
• Dearborn City School District (urban): math 26% / reading 39% proficiency, ranked #325 of 540 in MI (top 60%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1931 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+13.2%/yr); 102 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 11 sale attempts since 12y ago; this cycle's ask has dropped $8k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $45k; list at $117k implies a 160% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $33k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 9.4% vs local median 4.3% in Dearborn — 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.
• This rent runs 39% of the median local income ($42k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1931 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.