228 W Church St

Adrian, MI 49221

$125,000B-

15 bd · 9.0 ba · 2,526 sqft · Built 1880 · MultiFamily · Pending · 187 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,532/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$208
• HOA: −$0
• Vac / Maint / Mgmt: −$952
• Net cashflow: $2,716/mo
• Annual: $32,597/yr
• Cap rate: 32.37%
• Cash-on-cash: 93.13%
• DSCR: 5.14
• 1% rule: 3.63%
• Cash to close: $35,000

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $125k.
• At list price, monthly cash flow is $3k ($33k/yr) — positive. Per door: $905/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $125k).
• It's been on market 187 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#342 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, crime F, commute F.
• Adrian School District (town): math 25% / reading 35% proficiency, ranked #370 of 540 in MI (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Alexander Elementary School (math 32% / reading 42%, grade F, #685 of 1,397 statewide, top 51%, 472 students, 63% FRL); Springbrook Middle School (math 29% / reading 38%, grade F, #303 of 493 statewide, top 62%, 641 students, 71% FRL); Adrian High School (math 22% / reading 42%, grade F, #405 of 713 statewide, top 59%, 781 students, 63% FRL).
• Watch-outs: built in 1880 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 212 active listings in the ZIP; 137 units permitted in Lenawee County in 2024 (0 in 5+ unit buildings).
• Lenawee County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $20k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 32.4% vs local median 5.6% in Adrian — 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

• It's been on market 187 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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?
• 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.