405 W Thomas St

Bay City, MI 48706

$44,900B-

3 bd · 1.0 ba · 1,295 sqft · Built 1900 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,253/mo
• Mortgage (P&I): −$235
• Tax + insurance: −$138
• HOA: −$0
• Vac / Maint / Mgmt: −$263
• Net cashflow: $616/mo
• Annual: $7,391/yr
• Cap rate: 22.75%
• Cash-on-cash: 58.79%
• DSCR: 3.62
• 1% rule: 2.79%
• Cash to close: $12,572

Investor read

• This is a 3-bed/1.0-bath single-family listed at $45k.
• At list price, monthly cash flow is $616 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $310 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#360 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools D+, amenities D, crime F.
• Bay City School District (urban): math 27% / reading 40% proficiency, ranked #317 of 540 in MI (top 59%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.2% of price; built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 246 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 39 units permitted in Bay County in 2024 (0 in 5+ unit buildings).
• Bay County population projected at -21% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 9 sale attempts since 21y 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 $27k; list at $45k implies a 66% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $13k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 22.8% vs local median 5.5% in Bay City — 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

• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.