2022 Henry St

Muskegon, MI 49441

$137,500C

3 bd · 1.0 ba · 1,124 sqft · Built 1900 · SingleFamily · Active · 45 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,525/mo
• Mortgage (P&I): −$721
• Tax + insurance: −$235
• HOA: −$0
• Vac / Maint / Mgmt: −$320
• Net cashflow: $248/mo
• Annual: $2,974/yr
• Cap rate: 8.46%
• Cash-on-cash: 7.73%
• DSCR: 1.34
• 1% rule: 1.11%
• Cash to close: $38,500

Investor read

• This is a 3-bed/1.0-bath single-family listed at $138k.
• At list price, monthly cash flow is $248 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $138k).
• It's been on market 45 days — a 3% lower offer ($133k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $133k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $951 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#92 in MI, #2,096 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F, employment F.
• Muskegon Public Schools Of The City Of (urban): math 4% / reading 12% proficiency, ranked #534 of 540 in MI (top 99%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Bunker Elementary (math 2% / reading 8%, grade F, #1,325 of 1,397 statewide, top 99%, 398 students, 85% FRL); Muskegon Middle School (math 4% / reading 13%, grade F, #480 of 493 statewide, top 97%, 755 students, 87% FRL); Muskegon High School (math 8% / reading 27%, grade F, #632 of 713 statewide, top 89%, 1,039 students, 84% FRL) — zoned schools at 85% FRL track the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+18.1%/yr); 271 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 438 units permitted in Muskegon County in 2024 (115 in 5+ unit buildings).
• Muskegon County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 16 sale attempts since 31y 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 + 8.0% rent growth), your $38k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 8.5% vs local median 4.7% in Muskegon — 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

• It's been on market 45 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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?
• 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?
• 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.