686 N Perry St

Pontiac, MI 48342

$123,000C-

3 bd · 1.0 ba · 1,492 sqft · Built 1920 · SingleFamily · Active · 35 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,430/mo
• Mortgage (P&I): −$645
• Tax + insurance: −$149
• HOA: −$0
• Vac / Maint / Mgmt: −$300
• Net cashflow: $336/mo
• Annual: $4,028/yr
• Cap rate: 9.57%
• Cash-on-cash: 11.70%
• DSCR: 1.52
• 1% rule: 1.16%
• Cash to close: $34,440

Investor read

• This is a 3-bed/1.0-bath single-family listed at $123k.
• At list price, monthly cash flow is $336 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $123k).
• It's been on market 35 days — a 3% lower offer ($119k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $119k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $850 of loan paydown is wiped out by about $4k 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 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 87 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% 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.
• 4 sale attempts since 6y 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.
• Current owner paid $60k; list at $123k implies a 105% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.6% 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.

Questions for listing agent

• It's been on market 35 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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 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.
• 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.