735 Emerson Ave

Pontiac, MI 48340 3220

$98,000B+

2 bd · 1.0 ba · 786 sqft · Built 1955 · SingleFamily · Active · 92 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,306/mo
• Mortgage (P&I): −$514
• Tax + insurance: −$147
• HOA: −$0
• Vac / Maint / Mgmt: −$274
• Net cashflow: $371/mo
• Annual: $4,448/yr
• Cap rate: 10.83%
• Cash-on-cash: 16.21%
• DSCR: 1.72
• 1% rule: 1.33%
• Cash to close: $27,440

Investor read

• This is a 2-bed/1.0-bath single-family listed at $98k. Condition is rated fair.
• At list price, monthly cash flow is $371 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $98k).
• It's been on market 92 days — a 9% lower offer ($89k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (9.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($678 loan paydown + $3k appreciation (3.0% local appreciation)).
• Location reads 64/100 on livability (#499 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety D, crime F, amenities F.
• Pontiac City School District (urban): math 8% / reading 17% proficiency, ranked #514 of 540 in MI (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Herrington School (math 8% / reading 8%, grade F, #1,300 of 1,397 statewide, top 94%, 287 students, 88% FRL); Pontiac Middle School (math 8% / reading 23%, grade F, #450 of 493 statewide, top 91%, 729 students, 81% FRL); Pontiac High School (math 12% / reading 27%, grade F, #622 of 713 statewide, top 88%, 935 students, 75% FRL) — zoned schools at 81% FRL track the district average.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 1 active listings in the ZIP; 32 comparable units currently listed for rent nearby; rentals lingering (median 64d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 66% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 10 sale attempts since 18y ago; this cycle's ask has dropped $12k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $5k; list at $98k implies a 1963% gain — meaningful room to come down on a strong offer.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 10.8% vs local median 7.4% in Pontiac — 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 92 days. Have you received any prior offers? Is the seller open to a 9% 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 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: roof — Signs of wear and discoloration suggest significant damage.
• Major: siding — Peeling paint and siding indicate a need for replacement.
• Major: flooring — Worn flooring requires replacement for a better living experience.
• Major: interior walls — Peeling paint and signs of wear suggest a need for repainting and possibly repairs.
• Major: landscaping — Overgrown and untended landscaping detracts from the home's curb appeal and value.
• Major: HVAC — Given the overall condition, it is likely that the HVAC system needs maintenance or replacement to ensure comfort and energy efficiency.