6539 Forrer St

Detroit, MI 48228

$105,000C-

2 bd · 1.0 ba · 720 sqft · Built 1944 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,224/mo
• Mortgage (P&I): −$551
• Tax + insurance: −$275
• HOA: −$0
• Vac / Maint / Mgmt: −$257
• Net cashflow: $141/mo
• Annual: $1,698/yr
• Cap rate: 7.91%
• Cash-on-cash: 5.77%
• DSCR: 1.26
• 1% rule: 1.17%
• Cash to close: $29,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $105k.
• At list price, monthly cash flow is $141 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $105k).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $726 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#218 in MI) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F, employment F.
• Detroit Public Schools Community District (urban): math 10% / reading 24% proficiency, ranked #499 of 540 in MI (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 90% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Gardner Elementary School (math 10% / reading 10%, grade F, #1,230 of 1,397 statewide, top 91%, 282 students, 89% FRL); Cody High School (math 24% / reading 24%, grade F, #481 of 713 statewide, top 81%, 466 students, 88% FRL) — zoned schools at 88% FRL track the district average.
• Watch-outs: property tax is 2.6% of price; built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-2.3%/yr); 367 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 2,639 units permitted in Wayne County in 2024 (1,216 in 5+ unit buildings).
• Wayne County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 20 sale attempts since 22y 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 $82k; 27% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.9% vs local median 10.0% in Detroit — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $1,224/mo this rent would consume 48% of the median local household income ($31k/yr) (locally 4144% 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 1944 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.