47811 Frederick Rd

Sterling Heights, MI 48317

$234,900C-

4 bd · 1.0 ba · 1,660 sqft · Built 1944 · SingleFamily · Pending · 64 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,915/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$232
• HOA: −$0
• Vac / Maint / Mgmt: −$402
• Net cashflow: $49/mo
• Annual: $590/yr
• Cap rate: 6.54%
• Cash-on-cash: 0.90%
• DSCR: 1.04
• 1% rule: 0.82%
• Cash to close: $65,772

Investor read

• This is a 4-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $49 ($590/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $191k (18.5% below list).
• It's been on market 64 days — a 6% lower offer ($221k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $191k (18.5% 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 $7k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#173 in MI, #4,545 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools C-, health & safety D+, amenities F.
• Utica Community Schools (suburban): math 38% / reading 53% proficiency, ranked #126 of 540 in MI (top 23%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1944 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 101 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 8 sale attempts since 30y ago; this cycle's ask has dropped $25k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $148k; list at $235k implies a 59% gain — meaningful room to come down on a strong offer.
• Cap rate 6.5% vs local median 3.8% in Sterling Heights — 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.
• This rent runs 32% of the median local income ($73k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 64 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1944 — 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.