5656 Highbury Dr SE

Forest Hills, MI 49301

$575,000D

4 bd · 3.5 ba · 2,648 sqft · Built 2002 · Condo · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,500/mo
• Mortgage (P&I): −$3,015
• Tax + insurance: −$617
• HOA: −$52
• Vac / Maint / Mgmt: −$945
• Net cashflow: $-129/mo
• Annual: $-1,552/yr
• Cap rate: 6.02%
• Cash-on-cash: -0.96%
• DSCR: 0.96
• 1% rule: 0.78%
• Cash to close: $161,000

Investor read

• This is a 4-bed/3.5-bath condo listed at $575k.
• At list price, monthly cash flow is $-129 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $552k (4.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $450k (21.7% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $450k (21.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#139 in MI, #3,404 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: cost of living C-, amenities F, commute F.
• Forest Hills Public Schools (suburban): math 65% / reading 74% proficiency, ranked #11 of 540 in MI (top 2%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: Ada Elementary School (math 87% / reading 77%, grade A+, #12 of 1,397 statewide, top 1%, 331 students, 13% FRL); Central Middle School (math 68% / reading 82%, grade A, #8 of 493 statewide, top 3%, 526 students, 12% FRL); Central High School (math 68% / reading 84%, grade A-, #17 of 713 statewide, top 2%, 1,053 students, 14% FRL) — zoned schools at 13% FRL track the district average.
• Market conditions: 121 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 2,253 units permitted in Kent County in 2024 (969 in 5+ unit buildings).
• Kent County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 12 sale attempts since 17y 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 $459k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 2.8% in Forest Hills — 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

• 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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?
• 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.