117 W Petoskey St

Gaylord, MI 49735

$245,000F

3 bd · 1.5 ba · 1,842 sqft · Built 1973 · SingleFamily · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,990/mo
• Mortgage (P&I): −$1,285
• Tax + insurance: −$263
• HOA: −$0
• Vac / Maint / Mgmt: −$418
• Net cashflow: $25/mo
• Annual: $295/yr
• Cap rate: 6.41%
• Cash-on-cash: 0.43%
• DSCR: 1.02
• 1% rule: 0.81%
• Cash to close: $68,600

Investor read

• This is a 3-bed/1.5-bath single-family listed at $245k.
• At list price, monthly cash flow is $25 ($295/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 $199k (18.8% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $199k (18.8% 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 $7k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#246 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: crime F, amenities F, commute F.
• Gaylord Community Schools (rural): math 43% / reading 53% proficiency, ranked #123 of 540 in MI (top 23%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 209 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 24 units permitted in Otsego County in 2024 (0 in 5+ unit buildings).
• Otsego County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 12y 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 $80k; list at $245k implies a 204% gain — meaningful room to come down on a strong offer.
• Cap rate 6.4% vs local median 3.0% in Gaylord — 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

• Built in 1973 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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.