5207 Sturgeon Ave

Midland, MI 48640

$124,900B-

3 bd · 1.0 ba · 1,815 sqft · Built 1968 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,664/mo
• Mortgage (P&I): −$655
• Tax + insurance: −$275
• HOA: −$0
• Vac / Maint / Mgmt: −$349
• Net cashflow: $385/mo
• Annual: $4,618/yr
• Cap rate: 9.99%
• Cash-on-cash: 13.21%
• DSCR: 1.59
• 1% rule: 1.33%
• Cash to close: $34,972

Investor read

• This is a 3-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $385 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $125k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#28 in MI, #578 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: commute F.
• Midland Public Schools (urban): math 49% / reading 64% proficiency, ranked #62 of 540 in MI (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Woodcrest Elementary School (math 59% / reading 64%, grade B, #188 of 1,397 statewide, top 13%, 586 students, 30% FRL); Hh Dow High School (math 63% / reading 79%, grade B+, #31 of 713 statewide, top 4%, 1,268 students, 21% FRL) — zoned schools at 25% FRL track the district average.
• Market conditions: 110 active listings in the ZIP; solid renter incomes; 320 units permitted in Midland County in 2024 (204 in 5+ unit buildings).
• Midland County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $90k; 39% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 10.0% vs local median 4.4% in Midland — 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 1968 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.