7242 Gerald Ave

Warren, MI 48092

$176,900C-

3 bd · 1.0 ba · 1,120 sqft · Built 1958 · SingleFamily · Pending · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,819/mo
• Mortgage (P&I): −$928
• Tax + insurance: −$330
• HOA: −$0
• Vac / Maint / Mgmt: −$382
• Net cashflow: $179/mo
• Annual: $2,145/yr
• Cap rate: 7.51%
• Cash-on-cash: 4.33%
• DSCR: 1.19
• 1% rule: 1.03%
• Cash to close: $49,532

Investor read

• This is a 3-bed/1.0-bath single-family listed at $177k.
• At list price, monthly cash flow is $179 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $177k).
• It's been on market 65 days — a 6% lower offer ($166k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $166k (6.0% 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 $5k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#171 in MI, #4,491 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D, amenities D, employment D.
• Warren Consolidated Schools (urban): math 18% / reading 39% proficiency, ranked #373 of 540 in MI (top 69%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.0%/yr); 96 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,321 units permitted in Macomb County in 2024 (86 in 5+ unit buildings).
• Macomb County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 7 sale attempts since 10y ago; this cycle's ask has dropped $13k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $70k; list at $177k implies a 153% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $50k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.5% vs local median 5.2% in Warren — 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 65 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1958 — 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 D-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 D 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.
• 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.