38320 Saratoga Cir

Farmington Hills, MI 48331

$275,000D-

2 bd · 2.5 ba · 1,304 sqft · Built 1997 · Condo · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,048/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$499
• HOA: −$315
• Vac / Maint / Mgmt: −$430
• Net cashflow: $-639/mo
• Annual: $-7,665/yr
• Cap rate: 3.51%
• Cash-on-cash: -9.95%
• DSCR: 0.56
• 1% rule: 0.74%
• Cash to close: $77,000

Investor read

• This is a 2-bed/2.5-bath condo listed at $275k.
• At list price, monthly cash flow is $-639 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $162k (41.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $205k (25.5% below list).
• It's been on market 55 days — a 3% lower offer ($267k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $162k (41.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#64 in MI, #1,364 nationally) — a professional / high-income tenant draw. Strengths: employment A+, housing A+, crime A; Watch: amenities D, health & safety F.
• Farmington Public School District (urban): math 45% / reading 58% proficiency, ranked #78 of 540 in MI (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 19% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+9.7%/yr); 89 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 12y ago; this cycle's ask has dropped $20k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $165k; list at $275k implies a 67% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.