1202 Jerome St

Midland, MI 48640

$197,000D+

5 bd · 1.5 ba · 1,170 sqft · Built 1935 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,909/mo
• Mortgage (P&I): −$1,033
• Tax + insurance: −$278
• HOA: −$0
• Vac / Maint / Mgmt: −$401
• Net cashflow: $197/mo
• Annual: $2,368/yr
• Cap rate: 7.49%
• Cash-on-cash: 4.29%
• DSCR: 1.19
• 1% rule: 0.97%
• Cash to close: $55,160

Investor read

• This is a 5-bed/1.5-bath single-family listed at $197k.
• At list price, monthly cash flow is $197 ($2k/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 $191k (3.1% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $191k (3.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#28 in MI, #578 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: commute F.
• Midland Public Schools (urban): math 49% / reading 64% proficiency, ranked #62 of 540 in MI (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 110 active listings in the ZIP; solid renter incomes; 320 units permitted in Midland County in 2024 (204 in 5+ unit buildings).
• Midland County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.5% vs local median 4.4% in Midland — 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 1935 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.