220 S State St

Hart, MI 49420

$145,900D

4 bd · 2.5 ba · 1,350 sqft · Built 1940 · SingleFamily · Pending · 150 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,260/mo
• Mortgage (P&I): −$765
• Tax + insurance: −$240
• HOA: −$0
• Vac / Maint / Mgmt: −$265
• Net cashflow: $-10/mo
• Annual: $-119/yr
• Cap rate: 6.21%
• Cash-on-cash: -0.29%
• DSCR: 0.99
• 1% rule: 0.86%
• Cash to close: $40,852

Investor read

• This is a 4-bed/2.5-bath single-family listed at $146k.
• At list price, monthly cash flow is $-10 ($-119/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (1.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $126k (13.6% below list).
• It's been on market 150 days — a 12% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $126k (13.6% 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 $4k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#456 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A-; Watch: schools D, crime F, amenities F.
• Hart Public School District (town): math 18% / reading 38% proficiency, ranked #399 of 540 in MI (top 74%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 91 active listings in the ZIP; 147 units permitted in Oceana County in 2024 (0 in 5+ unit buildings).
• Oceana County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 5y ago; this cycle's ask has dropped $59k (29%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 6.2% vs local median 3.2% in Hart — 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?
• It's been on market 150 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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 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?