721 Indiana Ave

Michigan City, IN 46360

$161,500D

3 bd · 1.5 ba · 1,000 sqft · Built 1961 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,418/mo
• Mortgage (P&I): −$847
• Tax + insurance: −$259
• HOA: −$0
• Vac / Maint / Mgmt: −$298
• Net cashflow: $15/mo
• Annual: $180/yr
• Cap rate: 6.40%
• Cash-on-cash: 0.40%
• DSCR: 1.02
• 1% rule: 0.88%
• Cash to close: $45,220

Investor read

• This is a 3-bed/1.5-bath single-family listed at $162k.
• At list price, monthly cash flow is $15 ($180/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 $142k (12.2% below list).
• It's been on market 21 days — a 2% lower offer ($159k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $142k (12.2% 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 $5k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#15 in IN, #1,317 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D, amenities D-.
• Michigan City Area Schools (urban): math 23% / reading 28% proficiency, ranked #262 of 301 in IN (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Knapp Elementary School (math 37% / reading 43%, grade F, #494 of 994 statewide, top 50%, 376 students, 78% FRL); Barker Middle School (math 19% / reading 28%, grade F, #257 of 330 statewide, top 79%, 430 students, 79% FRL); Michigan City High School (math 17% / reading 37%, grade F, #315 of 369 statewide, top 86%, 1,555 students, 71% FRL).
• Market conditions: Rents rising fast (+9.7%/yr); 377 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 216 units permitted in LaPorte County in 2024 (75 in 5+ unit buildings).
• LaPorte County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $60k; list at $162k implies a 169% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.0% in Michigan 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 1961 — 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 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?
• 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.