11611 Sherwood Dr

Otsego Lake, MI 49733

$122,000D

2 bd · 2.0 ba · 858 sqft · Built 1978 · SingleFamily · Pending · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $866/mo
• Mortgage (P&I): −$640
• Tax + insurance: −$99
• HOA: −$0
• Vac / Maint / Mgmt: −$182
• Net cashflow: $-55/mo
• Annual: $-658/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.93%
• DSCR: 0.91
• 1% rule: 0.71%
• Cash to close: $34,160

Investor read

• This is a 2-bed/2.0-bath single-family listed at $122k.
• At list price, monthly cash flow is $-55 ($-658/yr) — negative.
• To cash-flow at today's rent, offer at most $112k (7.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $87k (29.0% below list).
• It's been on market 26 days — a 2% lower offer ($120k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $87k (29.0% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($843 loan paydown + $12k appreciation (10.0% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Gaylord Community Schools (rural): math 43% / reading 53% proficiency, ranked #123 of 540 in MI (top 23%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Gaylord High Schoolvoc Bldg (math 47% / reading 67%, grade C, #99 of 713 statewide, top 14%, 961 students, 43% FRL) — zoned schools at 43% FRL track the district average.
• Market conditions: 38 active listings in the ZIP; 24 units permitted in Otsego County in 2024 (0 in 5+ unit buildings).
• Otsego County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 5y ago 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 $34k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 1978 — 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.
• 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.
• 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.