705 Pearl St

Ypsilanti, MI 48197

$229,900D

5 bd · 2.0 ba · 1,562 sqft · Built 1880 · SingleFamily · Active · 74 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,038/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$507
• HOA: −$0
• Vac / Maint / Mgmt: −$428
• Net cashflow: $-102/mo
• Annual: $-1,229/yr
• Cap rate: 5.76%
• Cash-on-cash: -1.91%
• DSCR: 0.92
• 1% rule: 0.89%
• Cash to close: $64,372

Investor read

• This is a 5-bed/2.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $-102 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $212k (7.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (11.3% below list).
• It's been on market 74 days — a 6% lower offer ($216k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (11.3% 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 81/100 on livability (#71 in MI, #1,539 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F, employment D-.
• Ypsilanti Community Schools (suburban): math 11% / reading 20% proficiency, ranked #501 of 540 in MI (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1880 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 244 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 996 units permitted in Washtenaw County in 2024 (492 in 5+ unit buildings).
• Washtenaw County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 16y ago; this cycle's ask has dropped $19k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $48k; list at $230k implies a 382% gain — meaningful room to come down on a strong offer.
• Cap rate 5.8% vs local median 3.7% in Ypsilanti — 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 33% of the median local income ($74k/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 74 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• Built in 1880 — 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.
• 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?
• 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.