685 Ironwood Dr

Ann Arbor, MI 48103

$400,000D

4 bd · 1.5 ba · 1,969 sqft · Built 1977 · SingleFamily · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,793/mo
• Mortgage (P&I): −$2,098
• Tax + insurance: −$667
• HOA: −$0
• Vac / Maint / Mgmt: −$586
• Net cashflow: $-558/mo
• Annual: $-6,697/yr
• Cap rate: 4.62%
• Cash-on-cash: -5.98%
• DSCR: 0.73
• 1% rule: 0.70%
• Cash to close: $112,000

Investor read

• This is a 4-bed/1.5-bath single-family listed at $400k.
• At list price, monthly cash flow is $-558 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $319k (20.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $279k (30.2% below list).
• It's been on market 68 days — a 6% lower offer ($376k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $279k (30.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 88/100 on livability (#10 in MI, #155 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living D.
• Ann Arbor Public Schools (urban): math 71% / reading 81% proficiency, ranked #6 of 540 in MI (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Ann Arbor Open At Mack School (math 74% / reading 84%, grade A, #21 of 1,397 statewide, top 2%, 517 students, 11% FRL); Forsythe Middle School (math 62% / reading 82%, grade A, #21 of 493 statewide, top 5%, 578 students, 26% FRL); Skyline High School (math 77% / reading 87%, grade A, #4 of 713 statewide, top 1%, 1,315 students, 20% FRL) — zoned schools at 19% FRL track the district average.
• Market conditions: Rents flat; 238 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 996 units permitted in Washtenaw County in 2024 (492 in 5+ unit buildings).
• Washtenaw County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $40k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 4.6% vs local median 2.4% in Ann Arbor — 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 68 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• Built in 1977 — 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 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?
• 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.