6322 Pepper Hill St

Farmington Hills, MI 48322

$205,000C-

3 bd · 2.0 ba · 1,615 sqft · Built 1975 · Condo · Pending · 166 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,279/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$299
• HOA: −$444
• Vac / Maint / Mgmt: −$479
• Net cashflow: $-17/mo
• Annual: $-204/yr
• Cap rate: 6.19%
• Cash-on-cash: -0.35%
• DSCR: 0.98
• 1% rule: 1.11%
• Cash to close: $57,400

Investor read

• This is a 3-bed/2.0-bath condo listed at $205k.
• At list price, monthly cash flow is $-17 ($-204/yr) — negative.
• To cash-flow at today's rent, offer at most $202k (1.5% below list).
• Meets the 1% rule at list price ($2k rent vs $205k).
• It's been on market 166 days — a 12% lower offer ($180k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $180k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#64 in MI, #1,364 nationally) — a professional / high-income tenant draw. Strengths: employment A+, housing A+, crime A; Watch: amenities D, health & safety 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.
• Market conditions: Rents soft (-0.4%/yr); 181 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 13d 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.
• 9 sale attempts since 14y ago; this cycle's ask has dropped $25k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $2k; list at $205k implies a 13126% gain — meaningful room to come down on a strong offer.
• Cap rate 6.2% vs local median 3.5% in Farmington Hills — 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

• 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 166 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?