7604 Red Arrow Hwy #134

Paw Paw Lake, MI 49098

$59,000D-

3 bd · 2.0 ba · 1,216 sqft · Built 2014 · Manufactured · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,016/mo
• Mortgage (P&I): −$309
• Tax + insurance: −$98
• HOA: −$682
• Vac / Maint / Mgmt: −$213
• Net cashflow: $-287/mo
• Annual: $-3,449/yr
• Cap rate: 0.45%
• Cash-on-cash: -20.88%
• DSCR: 0.07
• 1% rule: 1.72%
• Cash to close: $16,520

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $59k. Condition is rated good.
• At list price, monthly cash flow is $-287 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $17k (70.5% below list).
• Meets the 1% rule at list price ($1k rent vs $59k).
• It's been on market 30 days — a 2% lower offer ($58k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $17k (70.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $408 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#420 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: amenities F, commute F, health & safety F.
• Watervliet School District (town): math 31% / reading 43% proficiency, ranked #260 of 540 in MI (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: South Elementary School (359 students, 68% FRL); Watervliet Middle School (math 31% / reading 45%, grade F, #235 of 493 statewide, top 49%, 288 students, 62% FRL); Watervliet Senior High School (math 22% / reading 52%, grade F, #334 of 713 statewide, top 51%, 393 students, 61% FRL).
• Watch-outs: HOA is 67% of rent.
• Market conditions: 81 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 397 units permitted in Berrien County in 2024 (40 in 5+ unit buildings).
• Berrien County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts; this cycle's ask has dropped $5k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 0.4% vs local median 2.5% in Paw Paw Lake — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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.
• 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.