12875 Steel St

Detroit, MI 48227

$117,000B-

5 bd · 1.0 ba · 1,368 sqft · Built 1928 · SingleFamily · Active · 97 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,588/mo
• Mortgage (P&I): −$614
• Tax + insurance: −$128
• HOA: −$0
• Vac / Maint / Mgmt: −$334
• Net cashflow: $513/mo
• Annual: $6,157/yr
• Cap rate: 11.56%
• Cash-on-cash: 18.79%
• DSCR: 1.84
• 1% rule: 1.36%
• Cash to close: $32,760

Investor read

• This is a 5-bed/1.0-bath single-family listed at $117k.
• At list price, monthly cash flow is $513 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $117k).
• It's been on market 97 days — a 9% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $809 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#218 in MI) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools F, crime F, employment F.
• Detroit Public Schools Community District (urban): math 10% / reading 24% proficiency, ranked #499 of 540 in MI (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 90% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.6%/yr); 385 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 2,639 units permitted in Wayne County in 2024 (1,216 in 5+ unit buildings).
• Wayne County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 22 sale attempts since 17y ago; this cycle's ask is 7448% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• At projected returns (-3.0% appreciation + 5.6% rent growth), your $33k cash investment doubles in ~6 years — after that, you're playing with house money.
• At $1,588/mo this rent would consume 52% of the median local household income ($37k/yr) (locally 2371% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 97 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1928 — 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 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?
• 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.