20440 Vernier Rd

Harper Woods, MI 48225

$45,000B

1 bd · 1.0 ba · 700 sqft · Built 1962 · Condo · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,159/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$75
• HOA: −$384
• Vac / Maint / Mgmt: −$243
• Net cashflow: $220/mo
• Annual: $2,644/yr
• Cap rate: 12.17%
• Cash-on-cash: 20.98%
• DSCR: 1.93
• 1% rule: 2.57%
• Cash to close: $12,600

Investor read

• This is a 1-bed/1.0-bath condo listed at $45k.
• At list price, monthly cash flow is $220 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $311 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#199 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D+, health & safety D+, schools D-.
• Grosse Pointe Public Schools (suburban): math 56% / reading 68% proficiency, ranked #24 of 540 in MI (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Watch-outs: HOA is 33% of rent.
• Market conditions: Rents rising fast (+5.1%/yr); 133 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 11 sale attempts since 32y 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.
• Current owner paid $16k; list at $45k implies a 177% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.1% rent growth), your $13k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 12.2% vs local median 7.7% in Harper Woods — 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

• Built in 1962 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 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.