427 S State Street St

Caro, MI 48723

$109,800D-

3 bd · 1.0 ba · 843 sqft · Built 1960 · SingleFamily · Pending · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $735/mo
• Mortgage (P&I): −$576
• Tax + insurance: −$117
• HOA: −$0
• Vac / Maint / Mgmt: −$154
• Net cashflow: $-112/mo
• Annual: $-1,339/yr
• Cap rate: 5.07%
• Cash-on-cash: -4.35%
• DSCR: 0.81
• 1% rule: 0.67%
• Cash to close: $30,744

Investor read

• This is a 3-bed/1.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $-112 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $90k (17.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $74k (33.0% below list).
• It's been on market 24 days — a 2% lower offer ($108k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $74k (33.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $759 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#546 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing B+; Watch: health & safety C-, crime F, amenities F.
• Caro Community Schools (town): math 22% / reading 36% proficiency, ranked #380 of 540 in MI (top 70%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 46 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 56 units permitted in Tuscola County in 2024 (0 in 5+ unit buildings).
• Tuscola County population projected at -29% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.

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 1960 — 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.
• 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?
• 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.