207 Michigan Avenue Ave

Mobile, AL 36604

$435,000C-

36 bd · 1.0 ba · 2,960 sqft · Built 1977 · MultiFamily · Active · 152 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $34,350/mo
• Mortgage (P&I): −$2,281
• Tax + insurance: −$436
• HOA: −$0
• Vac / Maint / Mgmt: −$7,214
• Net cashflow: $24,420/mo
• Annual: $293,036/yr
• Cap rate: 73.66%
• Cash-on-cash: 240.59%
• DSCR: 11.70
• 1% rule: 7.90%
• Cash to close: $121,800

Investor read

• This is a 6 × 6-bed/3.0-bath units multifamily listed at $435k. Condition is rated good.
• At list price, monthly cash flow is $24k ($293k/yr) — positive. Per door: $4k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($34k rent vs $435k).
• It's been on market 152 days — a 12% lower offer ($383k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $383k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#20 in AL, #4,262 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Mobile County (urban): math 15% / reading 39% proficiency, ranked #81 of 129 in AL (top 63%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Leinkauf Elementary School (math 8% / reading 26%, grade F, #499 of 627 statewide, top 80%, 538 students, 91% FRL); Calloway Smith Middle School (math 0% / reading 18%, grade F, #235 of 257 statewide, top 93%, 396 students, 96% FRL); Murphy High School (math 10% / reading 19%, grade F, #220 of 305 statewide, top 77%, 1,254 students, 66% FRL) — zoned schools average 84% FRL vs 67% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 14% at this address vs 27% district-wide (-13 pts) — the specific schools serving this property underperform the Mobile County average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising (+3.8%/yr); 166 active listings in the ZIP; 1,678 units permitted in Mobile County in 2024 (264 in 5+ unit buildings).
• Mobile County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 10 sale attempts since 2y ago; this cycle's ask has dropped $40k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $168k; list at $435k implies a 159% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.8% rent growth), your $122k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 73.7% vs local median 5.3% in Mobile — 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

• It's been on market 152 days. Have you received any prior offers? Is the seller open to a 12% 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 1977 — 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.
• 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?