4128 Michigan

St. Louis, MO 63118

$170,000D+

3 bd · 1.5 ba · 2,224 sqft · Built 1885 · SingleFamily · Pending · 201 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,604/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$158
• HOA: −$0
• Vac / Maint / Mgmt: −$337
• Net cashflow: $218/mo
• Annual: $2,613/yr
• Cap rate: 7.83%
• Cash-on-cash: 5.49%
• DSCR: 1.24
• 1% rule: 0.94%
• Cash to close: $47,600

Investor read

• This is a 3-bed/1.5-bath single-family listed at $170k.
• At list price, monthly cash flow is $218 ($3k/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 $160k (5.7% below list).
• It's been on market 201 days — a 12% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• St. Louis City (urban): math 10% / reading 18% proficiency, ranked #312 of 324 in MO (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Nahed Chapman New American Aca (math 2% / reading 2%, grade F, #1,099 of 1,115 statewide, top 100%, 335 students, 99% FRL); Gateway Middle (math 0% / reading 8%, grade F, #389 of 391 statewide, top 100%, 506 students, 99% FRL); Roosevelt High (math 2% / reading 8%, grade F, #517 of 521 statewide, top 100%, 460 students, 99% FRL) — zoned schools average 99% FRL vs 80% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1885 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.9%/yr); 242 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 294 units permitted in St. Louis city in 2024 (227 in 5+ unit buildings).
• St. Louis County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 3y ago; this cycle's ask has dropped $20k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.8% vs local median 5.0% in St. Louis — 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 33% of the median local income ($58k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 201 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1885 — 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.
• 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.