120 Palmer Ave

Colon, MI 49040

$129,000D+

3 bd · 1.0 ba · 1,054 sqft · Built 1945 · SingleFamily · Active · 114 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,056/mo
• Mortgage (P&I): −$676
• Tax + insurance: −$134
• HOA: −$0
• Vac / Maint / Mgmt: −$222
• Net cashflow: $24/mo
• Annual: $289/yr
• Cap rate: 6.52%
• Cash-on-cash: 0.80%
• DSCR: 1.04
• 1% rule: 0.82%
• Cash to close: $36,120

Investor read

• This is a 3-bed/1.0-bath single-family listed at $129k.
• At list price, monthly cash flow is $24 ($289/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $106k (18.2% below list).
• It's been on market 114 days — a 9% lower offer ($117k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (18.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $892 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#372 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools D-, amenities F, commute F.
• Colon Community School District (rural): math 17% / reading 28% proficiency, ranked #446 of 540 in MI (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 38 active listings in the ZIP; 125 units permitted in St. Joseph County in 2024 (0 in 5+ unit buildings).
• St. Joseph County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 15 sale attempts since 27y 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 $64k; list at $129k implies a 103% gain — meaningful room to come down on a strong offer.
• Cap rate 6.5% vs local median 3.0% in Colon — 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 114 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1945 — 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 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.