5731 Farmington Rd

Orchard Lake Village, MI 48322

$425,000D-

3 bd · 2.5 ba · 1,888 sqft · Built 1972 · SingleFamily · Active · 113 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,853/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$414
• HOA: −$0
• Vac / Maint / Mgmt: −$599
• Net cashflow: $-389/mo
• Annual: $-4,664/yr
• Cap rate: 5.20%
• Cash-on-cash: -3.92%
• DSCR: 0.83
• 1% rule: 0.67%
• Cash to close: $119,000

Investor read

• This is a 3-bed/2.5-bath single-family listed at $425k.
• At list price, monthly cash flow is $-389 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $356k (16.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $285k (32.9% below list).
• It's been on market 113 days — a 9% lower offer ($387k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $285k (32.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#465 in MI) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• West Bloomfield School District (suburban): math 42% / reading 55% proficiency, ranked #83 of 540 in MI (top 15%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Doherty Elementary School (479 students, 36% FRL); West Bloomfield Middle School (math 46% / reading 55%, grade C, #110 of 493 statewide, top 23%, 941 students, 42% FRL); West Bloomfield High School (math 40% / reading 61%, grade D+, #146 of 713 statewide, top 21%, 1,652 students, 34% FRL).
• Market conditions: Rents soft (-0.4%/yr); 188 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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 2y ago; this cycle's ask has dropped $75k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $170k; list at $425k implies a 150% gain — meaningful room to come down on a strong offer.
• Cap rate 5.2% vs local median 3.2% in Orchard Lake Village — 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 30% of the median local income ($114k/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 113 days. Have you received any prior offers? Is the seller open to a 33% concession, seller financing, or rate buy-down credit?
• Built in 1972 — 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 B-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.