560 Michigan Ave

Mobile, AL 36604

$84,900B+

3 bd · 1.0 ba · 1,607 sqft · Built 1984 · SingleFamily · Active · 235 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,797/mo
• Mortgage (P&I): −$445
• Tax + insurance: −$112
• HOA: −$0
• Vac / Maint / Mgmt: −$377
• Net cashflow: $862/mo
• Annual: $10,349/yr
• Cap rate: 18.48%
• Cash-on-cash: 43.53%
• DSCR: 2.94
• 1% rule: 2.12%
• Cash to close: $23,772

Investor read

• This is a 3-bed/1.0-bath single-family listed at $85k.
• At list price, monthly cash flow is $862 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 235 days — a 12% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $587 of loan paydown is wiped out by about $3k 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: schools D-, 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.
• Market conditions: Rents rising (+3.8%/yr); 93 active listings in the ZIP; 26 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 54% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 6 sale attempts; this cycle's ask has dropped $54k (39%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $73k; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.8% rent growth), your $24k cash investment doubles in ~3 years — 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 18.5% vs local median 4.9% 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.
• This rent runs 32% of the median local income ($66k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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?
• 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.