725 W 70th Ave

Merrillville, IN 46410

$275,000D

3 bd · 1.5 ba · 1,750 sqft · Built 1961 · SingleFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,496/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$226
• HOA: −$0
• Vac / Maint / Mgmt: −$524
• Net cashflow: $303/mo
• Annual: $3,639/yr
• Cap rate: 7.62%
• Cash-on-cash: 4.73%
• DSCR: 1.21
• 1% rule: 0.91%
• Cash to close: $77,000

Investor read

• This is a 3-bed/1.5-bath single-family listed at $275k.
• At list price, monthly cash flow is $303 ($4k/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 $250k (9.2% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $250k (9.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#50 in IN, #3,393 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F, health & safety D-.
• Merrillville Community School Corporation (suburban): math 22% / reading 36% proficiency, ranked #240 of 301 in IN (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Homer Iddings Elementary School (math 22% / reading 22%, grade F, #790 of 994 statewide, top 81%, 488 students, 69% FRL); Pierce Middle School (math 18% / reading 37%, grade F, #230 of 330 statewide, top 71%, 919 students, 70% FRL); Merrillville High School (math 19% / reading 55%, grade F, #247 of 369 statewide, top 70%, 2,042 students, 64% FRL) — zoned schools average 68% FRL vs 50% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+4.1%/yr); 272 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 9d on market — plan ~1-2 weeks tenant-placement turnaround); 1,642 units permitted in Lake County in 2024 (14 in 5+ unit buildings).
• Lake County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 7.6% vs local median 4.7% in Merrillville — 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 $2,496/mo this rent would consume 47% of the median local household income ($64k/yr) (locally 1644% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1961 — 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?
• 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.
• 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.