12256 Pearl St

Southgate, MI 48195

$179,900D

3 bd · 1.0 ba · 1,140 sqft · Built 1948 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,601/mo
• Mortgage (P&I): −$943
• Tax + insurance: −$278
• HOA: −$0
• Vac / Maint / Mgmt: −$336
• Net cashflow: $43/mo
• Annual: $516/yr
• Cap rate: 6.58%
• Cash-on-cash: 1.02%
• DSCR: 1.05
• 1% rule: 0.89%
• Cash to close: $50,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $180k.
• At list price, monthly cash flow is $43 ($516/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 $160k (11.0% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $160k (11.0% 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 $5k 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: Shelters Elementary School (math 27% / reading 37%, grade F, #814 of 1,397 statewide, top 61%, 272 students, 58% 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 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 117 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 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.
• 13 sale attempts since 20y 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 $36k; list at $180k implies a 400% gain — meaningful room to come down on a strong offer.
• Cap rate 6.6% vs local median 5.2% in Southgate — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

Questions for listing agent

• Built in 1948 — 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.
• 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.