13085 Orchard Rd

Southgate, MI 48195

$215,000F

3 bd · 1.0 ba · 1,013 sqft · Built 1953 · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,598/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$351
• HOA: −$0
• Vac / Maint / Mgmt: −$336
• Net cashflow: $-216/mo
• Annual: $-2,590/yr
• Cap rate: 5.09%
• Cash-on-cash: -4.30%
• DSCR: 0.81
• 1% rule: 0.74%
• Cash to close: $60,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $215k.
• At list price, monthly cash flow is $-216 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $177k (17.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $160k (25.7% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $160k (25.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#29 in MI, #582 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime D-.
• Southgate Community School District (suburban): math 21% / reading 36% proficiency, ranked #379 of 540 in MI (top 70%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Allen Elementary School (math 22% / reading 32%, grade F, #923 of 1,397 statewide, top 69%, 338 students, 59% FRL); Davidson Middle School (math 23% / reading 36%, grade F, #343 of 493 statewide, top 72%, 631 students, 52% FRL); Southgate Anderson High School (math 22% / reading 62%, grade F, #264 of 713 statewide, top 41%, 990 students, 45% FRL).
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 117 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 4 sale attempts since 15y 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 $72k; list at $215k implies a 201% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1953 — 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?
• 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.
• 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.