705 Preston Ct

Rochester Hills, MI 48307 4596

$299,999D-

3 bd · 2.5 ba · 1,668 sqft · Built 1994 · Condo · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,450/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$321
• HOA: −$387
• Vac / Maint / Mgmt: −$515
• Net cashflow: $-346/mo
• Annual: $-4,151/yr
• Cap rate: 4.91%
• Cash-on-cash: -4.94%
• DSCR: 0.78
• 1% rule: 0.82%
• Cash to close: $84,000

Investor read

• This is a 3-bed/2.5-bath condo listed at $300k.
• At list price, monthly cash flow is $-346 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $239k (20.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $245k (18.3% below list).
• It's been on market 27 days — a 2% lower offer ($295k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $239k (20.4% below list) — sets the bar for cash-flow.
• In year one you build about $11k of equity ($2k loan paydown + $9k appreciation (3.0% local appreciation)).
• Location reads 77/100 on livability (#127 in MI, #3,163 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: health & safety D, amenities F, commute F.
• Rochester Community School District (suburban): math 60% / reading 69% proficiency, ranked #21 of 540 in MI (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: 1 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 29y 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.
• By year 4, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.9% vs local median 3.2% in Rochester 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.