407 Chestnut St

Reading, MI 49274

$74,837B-

3 bd · 1.5 ba · 1,875 sqft · Built 1900 · SingleFamily · Active · 50 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,467/mo
• Mortgage (P&I): −$392
• Tax + insurance: −$102
• HOA: −$0
• Vac / Maint / Mgmt: −$308
• Net cashflow: $664/mo
• Annual: $7,966/yr
• Cap rate: 16.94%
• Cash-on-cash: 38.01%
• DSCR: 2.69
• 1% rule: 1.96%
• Cash to close: $20,954

Investor read

• This is a 3-bed/1.5-bath single-family listed at $75k.
• At list price, monthly cash flow is $664 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $75k).
• It's been on market 50 days — a 3% lower offer ($73k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $73k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $518 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#352 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, schools D-, amenities F.
• Reading Community Schools (rural): math 27% / reading 36% proficiency, ranked #350 of 540 in MI (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 31 active listings in the ZIP; 72 units permitted in Hillsdale County in 2024 (0 in 5+ unit buildings).
• Hillsdale County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 8 sale attempts since 7y ago; this cycle's ask has dropped $24k (24%) 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 $21k cash investment doubles in ~4 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 50 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.