316/324 Stuart Ave

Kalamazoo, MI 49007

$1,000,000B

216 bd · 1.0 ba · 9,276 sqft · Built 1890 · MultiFamily · Active · 60 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $27,265/mo
• Mortgage (P&I): −$5,244
• Tax + insurance: −$1,032
• HOA: −$0
• Vac / Maint / Mgmt: −$5,726
• Net cashflow: $15,263/mo
• Annual: $183,158/yr
• Cap rate: 24.61%
• Cash-on-cash: 65.41%
• DSCR: 3.91
• 1% rule: 2.73%
• Cash to close: $280,000

Investor read

• This is a 18 × 12-bed/12.0-bath units multifamily listed at $1.00M.
• At list price, monthly cash flow is $15k ($183k/yr) — positive. Per door: $848/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($27k rent vs $1.00M).
• It's been on market 60 days — a 3% lower offer ($970k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $970k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#141 in MI, #3,492 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Kalamazoo Public Schools (urban): math 43% / reading 72% proficiency, ranked #71 of 540 in MI (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.8%/yr); 77 active listings in the ZIP; lower-income renter base — watch delinquency; 339 units permitted in Kalamazoo County in 2024 (22 in 5+ unit buildings).
• Kalamazoo County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 2y 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.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $280k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 24.6% vs local median 4.2% in Kalamazoo — 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.
• At $27,265/mo this rent would consume 832% of the median local household income ($39k/yr) (locally 816% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 60 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1890 — 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.
• 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.