31276 Water Rd

Sturgis, MI 49091

$129,900D-

2 bd · 1.0 ba · 1,269 sqft · Built 1920 · SingleFamily · Pending · 93 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,134/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$96
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $118/mo
• Annual: $1,420/yr
• Cap rate: 7.39%
• Cash-on-cash: 3.90%
• DSCR: 1.17
• 1% rule: 0.87%
• Cash to close: $36,372

Investor read

• This is a 2-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $118 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $113k (12.7% below list).
• It's been on market 93 days — a 9% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $113k (12.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#226 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools D, crime D-, amenities F.
• Sturgis Public Schools (town): math 20% / reading 32% proficiency, ranked #413 of 540 in MI (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 113 active listings in the ZIP; 125 units permitted in St. Joseph County in 2024 (0 in 5+ unit buildings).
• St. Joseph County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 8 sale attempts since 7y ago; this cycle's ask has dropped $35k (21%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $109k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.4% vs local median 4.0% in Sturgis — 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 93 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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 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?
• Crime grade is D 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.