2716 7th St

Muskegon Heights, MI 49444

$179,900B

12 bd · 1.0 ba · 1,652 sqft · Built 1915 · MultiFamily · Active · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,447/mo
• Mortgage (P&I): −$943
• Tax + insurance: −$202
• HOA: −$0
• Vac / Maint / Mgmt: −$724
• Net cashflow: $1,578/mo
• Annual: $18,936/yr
• Cap rate: 16.82%
• Cash-on-cash: 37.59%
• DSCR: 2.67
• 1% rule: 1.92%
• Cash to close: $50,372

Investor read

• This is a 3 × 3-bed/1.5-bath units multifamily listed at $180k.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $526/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $180k).
• It's been on market 91 days — a 9% lower offer ($164k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $164k (9.0% below list) — sets the bar for market timing.
• 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 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 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 239 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.
• 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $50k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 16.8% 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.
• At $3,447/mo this rent would consume 78% of the median local household income ($53k/yr) (locally 930% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 1915 — 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?