5767 Main St

Lexington, MI 48450

$39,900B-

2 bd · 1.0 ba · 450 sqft · Built 1973 · SingleFamily · Active · 235 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $797/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$66
• HOA: −$0
• Vac / Maint / Mgmt: −$167
• Net cashflow: $354/mo
• Annual: $4,244/yr
• Cap rate: 16.93%
• Cash-on-cash: 37.99%
• DSCR: 2.69
• 1% rule: 2.00%
• Cash to close: $11,172

Investor read

• This is a 2-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $354 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($797 rent vs $40k).
• It's been on market 235 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#494 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools A-; Watch: employment D, amenities F, commute F.
• Croswell-Lexington Community Schools (rural): math 30% / reading 47% proficiency, ranked #239 of 540 in MI (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 118 active listings in the ZIP; 63 units permitted in Sanilac County in 2024 (0 in 5+ unit buildings).
• Sanilac County population projected at -31% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 18y ago; this cycle's ask has dropped $5k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 16.9% vs local median 2.1% in Lexington — 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 235 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1973 — 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 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?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?