21251 8 1/2 Mile Rd

Southfield, MI 48075

$220,000C-

4 bd · 2.5 ba · 2,090 sqft · Built 1947 · SingleFamily · Pending · 181 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,268/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$314
• HOA: −$0
• Vac / Maint / Mgmt: −$476
• Net cashflow: $324/mo
• Annual: $3,884/yr
• Cap rate: 8.06%
• Cash-on-cash: 6.30%
• DSCR: 1.28
• 1% rule: 1.03%
• Cash to close: $61,600

Investor read

• This is a 4-bed/2.5-bath single-family listed at $220k.
• At list price, monthly cash flow is $324 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $220k).
• It's been on market 181 days — a 12% lower offer ($194k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $194k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#248 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: schools D, health & safety D, crime F.
• Southfield Public School District (urban): math 17% / reading 37% proficiency, ranked #392 of 540 in MI (top 73%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.1%/yr); 95 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 8 sale attempts since 23y 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 $55k; list at $220k implies a 300% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $62k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 8.1% vs local median 4.2% in Southfield — 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.
• This rent runs 42% of the median local income ($65k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 181 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1947 — 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?
• 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.