1201 Wabash St

Michigan City, IN 46360

$174,900B

5 bd · 2.0 ba · 2,458 sqft · Built 1904 · MultiFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,779/mo
• Mortgage (P&I): −$917
• Tax + insurance: −$270
• HOA: −$0
• Vac / Maint / Mgmt: −$584
• Net cashflow: $1,008/mo
• Annual: $12,098/yr
• Cap rate: 13.21%
• Cash-on-cash: 24.70%
• DSCR: 2.10
• 1% rule: 1.59%
• Cash to close: $48,972

Investor read

• This is a 5-bed/2.0-bath multifamily listed at $175k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $175k).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#15 in IN, #1,317 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D, amenities D-.
• Michigan City Area Schools (urban): math 23% / reading 28% proficiency, ranked #262 of 301 in IN (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Knapp Elementary School (math 37% / reading 43%, grade F, #494 of 994 statewide, top 50%, 376 students, 78% FRL); Barker Middle School (math 19% / reading 28%, grade F, #257 of 330 statewide, top 79%, 430 students, 79% FRL); Michigan City High School (math 17% / reading 37%, grade F, #315 of 369 statewide, top 86%, 1,555 students, 71% FRL).
• Watch-outs: built in 1904 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.7%/yr); 377 active listings in the ZIP; 216 units permitted in LaPorte County in 2024 (75 in 5+ unit buildings).
• LaPorte County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 21y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $49k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.2% vs local median 2.9% in Michigan City — 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 $2,779/mo this rent would consume 56% of the median local household income ($59k/yr) (locally 1152% 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 1904 — 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.