231 Academy St

Ferndale, MI 48220

$299,000D

4 bd · 1.5 ba · 1,874 sqft · Built 1938 · SingleFamily · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,334/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$381
• HOA: −$0
• Vac / Maint / Mgmt: −$490
• Net cashflow: $-105/mo
• Annual: $-1,260/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.50%
• DSCR: 0.93
• 1% rule: 0.78%
• Cash to close: $83,720

Investor read

• This is a 4-bed/1.5-bath single-family listed at $299k.
• At list price, monthly cash flow is $-105 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $280k (6.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $233k (21.9% below list).
• It's been on market 49 days — a 3% lower offer ($290k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $233k (21.9% 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 $9k of value loss. Plan a longer hold.
• Location reads 90/100 on livability (#8 in MI, #103 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: schools D+.
• Ferndale Public Schools (suburban): math 18% / reading 39% proficiency, ranked #366 of 540 in MI (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.2%/yr); 171 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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.
• 8 sale attempts since 23y ago; this cycle's ask has dropped $30k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $138k; list at $299k implies a 117% gain — meaningful room to come down on a strong offer.
• Cap rate 5.9% vs local median 4.5% in Ferndale — 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.
• This rent runs 31% of the median local income ($90k/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 49 days. Have you received any prior offers? Is the seller open to a 22% concession, seller financing, or rate buy-down credit?
• Built in 1938 — 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?
• 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.