6422 Lerner Way

Lansing, MI 48911

$237,900F

4 bd · 1.5 ba · 1,219 sqft · Built 1970 · SingleFamily · Pending · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,536/mo
• Mortgage (P&I): −$1,248
• Tax + insurance: −$415
• HOA: −$0
• Vac / Maint / Mgmt: −$323
• Net cashflow: $-448/mo
• Annual: $-5,381/yr
• Cap rate: 4.03%
• Cash-on-cash: -8.08%
• DSCR: 0.64
• 1% rule: 0.65%
• Cash to close: $66,612

Investor read

• This is a 4-bed/1.5-bath single-family listed at $238k.
• At list price, monthly cash flow is $-448 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $159k (33.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $154k (35.4% below list).
• It's been on market 79 days — a 6% lower offer ($224k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (35.4% 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 79/100 on livability (#94 in MI, #2,182 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment D, schools F, crime F.
• Lansing Public School District (urban): math 14% / reading 23% proficiency, ranked #650 of 760 in MI (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+9.9%/yr); 143 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 350 units permitted in Ingham County in 2024 (186 in 5+ unit buildings).
• Ingham County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts 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 $123k; list at $238k implies a 94% gain — meaningful room to come down on a strong offer.
• Cap rate 4.0% vs local median 6.0% in Lansing — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 33% of the median local income ($57k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 79 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• Built in 1970 — 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 F-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?