426 E Webster St

Ferndale, MI 48220

$200,000D

3 bd · 1.0 ba · 929 sqft · Built 1938 · SingleFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,711/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$399
• HOA: −$0
• Vac / Maint / Mgmt: −$359
• Net cashflow: $-96/mo
• Annual: $-1,153/yr
• Cap rate: 5.72%
• Cash-on-cash: -2.06%
• DSCR: 0.91
• 1% rule: 0.86%
• Cash to close: $56,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-96 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $183k (8.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $171k (14.4% below list).
• It's been on market 16 days — a 2% lower offer ($197k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $171k (14.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 90/100 on livability (#8 in MI, #103 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Ferndale Public Schools (suburban): math 18% / reading 39% proficiency, ranked #366 of 540 in MI (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Ferndale Lower Elementary Campus (476 students, 53% FRL); Ferndale Middle School (math 13% / reading 35%, grade F, #396 of 493 statewide, top 81%, 540 students, 62% FRL); Ferndale High School (math 32% / reading 57%, grade F, #214 of 713 statewide, top 36%, 712 students, 58% FRL).
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.2%/yr); 179 active listings in the ZIP; 33 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 7 sale attempts since 23y 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 $150k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 4.5% in Ferndale — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 1938 — 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 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?
• 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.