518 & 528 Chippewa Rd

Fair Plain, MI 49022

$355,000B-

4 bd · 2.0 ba · 990 sqft · Built 1952 · MultiFamily · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,846/mo
• Mortgage (P&I): −$1,862
• Tax + insurance: −$293
• HOA: −$0
• Vac / Maint / Mgmt: −$1,018
• Net cashflow: $1,673/mo
• Annual: $20,079/yr
• Cap rate: 11.95%
• Cash-on-cash: 20.20%
• DSCR: 1.90
• 1% rule: 1.37%
• Cash to close: $99,400

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $355k.
• At list price, monthly cash flow is $2k ($20k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $355k).
• It's been on market 56 days — a 3% lower offer ($344k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $344k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#495 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, schools F, amenities F.
• Benton Harbor Area Schools (urban): math 4% / reading 7% proficiency, ranked #732 of 760 in MI (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 89% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 178 active listings in the ZIP; 397 units permitted in Berrien County in 2024 (40 in 5+ unit buildings).
• Berrien County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $99k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.9% vs local median 2.7% in Fair Plain — 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 56 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1952 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.