2417 Baker St

Muskegon Heights, MI 49444

$139,900C+

5 bd · 2.0 ba · 1,788 sqft · Built 1925 · MultiFamily · Active · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,881/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$196
• HOA: −$0
• Vac / Maint / Mgmt: −$395
• Net cashflow: $556/mo
• Annual: $6,674/yr
• Cap rate: 11.06%
• Cash-on-cash: 17.04%
• DSCR: 1.76
• 1% rule: 1.34%
• Cash to close: $39,172

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $140k.
• At list price, monthly cash flow is $556 ($7k/yr) — positive. Per door: $278/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 91 days — a 9% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#574 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A; Watch: schools D+, crime F, amenities F.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 237 active listings in the ZIP; 438 units permitted in Muskegon County in 2024 (115 in 5+ unit buildings).
• Muskegon County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 8 sale attempts since 24y ago 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 11.1% vs local median 8.4% in Muskegon Heights — 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.
• This rent runs 43% of the median local income ($53k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 91 days. Have you received any prior offers? Is the seller open to a 9% 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 1925 — 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?