48 Augusta Ave

Pontiac, MI 48341

$199,000B-

12 bd · 9.0 ba · 1,413 sqft · Built 1914 · MultiFamily · Pending · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,184/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$332
• HOA: −$0
• Vac / Maint / Mgmt: −$669
• Net cashflow: $1,140/mo
• Annual: $13,681/yr
• Cap rate: 13.17%
• Cash-on-cash: 24.55%
• DSCR: 2.09
• 1% rule: 1.60%
• Cash to close: $55,720

Investor read

• This is a 2×1bd/1ba + 1×2bd/1ba units multifamily listed at $199k. Condition is rated poor.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $380/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $199k).
• It's been on market 75 days — a 6% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $187k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• 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, schools F, crime 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.
• Watch-outs: built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 100 active listings in the ZIP; 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.
• 4 sale attempts since 4y ago; this cycle's ask has dropped $21k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $55k; list at $199k implies a 262% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $56k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.2% vs local median 6.7% 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.
• At $3,184/mo this rent would consume 74% of the median local household income ($51k/yr) (locally 833% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 75 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1914 — 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?

Repairs flagged (vision-AI assessment)

• Major: Kitchen countertops and cabinets — The countertops and cabinets are visibly worn and need replacement.
• Major: Bathroom fixtures and tiles — The fixtures and tiles are outdated and in poor condition.
• Major: Flooring — The flooring is worn and needs replacement.
• Major: Interior walls and paint — The walls show significant wear and need repainting or replacement.
• Major: Roof — The roof appears damaged and may need replacement.
• Major: Exterior siding — The siding is peeling and needs repair or replacement.