5103 Ridgetop Dr

Pontiac, MI 48327

$275,000F

3 bd · 1.0 ba · 1,447 sqft · Built 1966 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,880/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$511
• HOA: −$0
• Vac / Maint / Mgmt: −$395
• Net cashflow: $-468/mo
• Annual: $-5,611/yr
• Cap rate: 4.25%
• Cash-on-cash: -7.29%
• DSCR: 0.68
• 1% rule: 0.68%
• Cash to close: $77,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $275k.
• At list price, monthly cash flow is $-468 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $192k (30.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $188k (31.6% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $188k (31.6% 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 $8k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#499 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety D, schools F, crime F.
• Waterford School District (suburban): math 26% / reading 42% proficiency, ranked #285 of 540 in MI (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 102 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 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.
• Cap rate 4.3% vs local median 5.4% in Pontiac — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 30% of the median local income ($75k/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?
• Built in 1966 — 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?
• 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.
• 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.