2987 Gladstone St

Detroit, MI 48206

$175,000D

1564 bd · 1156.0 ba · 28,696 sqft · Built 1925 · MultiFamily · Pending · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $58,275/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$292
• HOA: −$0
• Vac / Maint / Mgmt: −$12,238
• Net cashflow: $44,828/mo
• Annual: $537,934/yr
• Cap rate: 313.68%
• Cash-on-cash: 1097.83%
• DSCR: 49.85
• 1% rule: 33.30%
• Cash to close: $49,000

Investor read

• This is a 34 × 46-bed/34.0-bath units multifamily listed at $175k.
• At list price, monthly cash flow is $45k ($538k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($58k rent vs $175k).
• It's been on market 81 days — a 6% lower offer ($164k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $164k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#218 in MI) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools F, crime F, employment F.
• Detroit Public Schools Community District (urban): math 10% / reading 24% proficiency, ranked #499 of 540 in MI (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 90% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.2%/yr); 273 active listings in the ZIP; 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 3y 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 (-3.0% appreciation + 5.2% rent growth), your $49k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 313.7% vs local median 10.0% in Detroit — 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.
• At $58,275/mo this rent would consume 1552% of the median local household income ($45k/yr) (locally 646% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 81 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-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?