4660 Royal Cove Dr #5

Rochester, MI 48316

$300,000F

3 bd · 2.5 ba · 1,768 sqft · Built 1993 · Condo · Pending · 112 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,922/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$341
• HOA: −$300
• Vac / Maint / Mgmt: −$404
• Net cashflow: $-695/mo
• Annual: $-8,345/yr
• Cap rate: 3.51%
• Cash-on-cash: -9.93%
• DSCR: 0.56
• 1% rule: 0.64%
• Cash to close: $84,000

Investor read

• This is a 3-bed/2.5-bath condo listed at $300k.
• At list price, monthly cash flow is $-695 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $177k (41.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $192k (35.9% below list).
• It's been on market 112 days — a 9% lower offer ($273k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $177k (41.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#150 in MI, #3,744 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living D+, amenities D, health & safety D.
• 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.
• Market conditions: 167 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 2 sale attempts; this cycle's ask has dropped $50k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 3.5% vs local median 2.2% in Rochester — 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

• 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?
• It's been on market 112 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• 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?
• 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 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?
• 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?