3801 Ellery St

Detroit, MI 48207

$289,900B-

8 bd · 4.0 ba · 3,663 sqft · Built 1909 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,365/mo
• Mortgage (P&I): −$1,520
• Tax + insurance: −$483
• HOA: −$0
• Vac / Maint / Mgmt: −$1,127
• Net cashflow: $2,235/mo
• Annual: $26,819/yr
• Cap rate: 15.54%
• Cash-on-cash: 33.04%
• DSCR: 2.47
• 1% rule: 1.85%
• Cash to close: $81,172

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $290k.
• At list price, monthly cash flow is $2k ($27k/yr) — positive. Per door: $559/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $290k).
• It's been on market 48 days — a 3% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $281k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-2.8%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#218 in MI) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools F, crime F, employment F.
• Detroit Public Schools Community District (urban): math 10% / reading 24% proficiency, ranked #499 of 540 in MI (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 90% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1909 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.5%/yr); 245 active listings in the ZIP; 2,639 units permitted in Wayne County in 2024 (1,216 in 5+ unit buildings).
• Wayne County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-2.8% appreciation + 3.5% rent growth), your $81k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.5% vs local median 10.0% in Detroit — 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.
• At $5,365/mo this rent would consume 135% of the median local household income ($48k/yr) (locally 2017% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 48 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1909 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.