6552 W 11 1/2 Mile Rd

Wellston, MI 49644

$125,000D

2 bd · 1.0 ba · 860 sqft · Built 1974 · SingleFamily · Active · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $862/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$79
• HOA: −$0
• Vac / Maint / Mgmt: −$181
• Net cashflow: $-54/mo
• Annual: $-644/yr
• Cap rate: 5.78%
• Cash-on-cash: -1.84%
• DSCR: 0.92
• 1% rule: 0.69%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $-54 ($-644/yr) — negative.
• To cash-flow at today's rent, offer at most $116k (7.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (31.0% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $86k (31.0% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($864 loan paydown + $12k appreciation (10.0% local appreciation)).
• Location reads 56/100 on livability (#661 in MI) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Baldwin Community Schools (rural): math 21% / reading 28% proficiency, ranked #618 of 760 in MI (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 85% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Baldwin Elementary School (math 8% / reading 17%, grade F, #1,203 of 1,397 statewide, top 87%, 224 students, 97% FRL); Baldwin Junior High School (math 2% / reading 22%, grade F, #466 of 493 statewide, top 95%, 99 students, 98% FRL); Baldwin Senior High School (math 24% / reading 24%, grade F, #481 of 713 statewide, top 81%, 119 students, 96% FRL).
• Market conditions: 65 active listings in the ZIP; 30 units permitted in Lake County in 2024 (0 in 5+ unit buildings).
• Lake County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 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 (10.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.

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 1974 — 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.