185 Michelson Rd

Rochester Hills, MI 48307

$367,500C-

4 bd · 2.0 ba · 2,386 sqft · Built 1986 · SingleFamily · Active · 178 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,952/mo
• Mortgage (P&I): −$1,927
• Tax + insurance: −$397
• HOA: −$0
• Vac / Maint / Mgmt: −$620
• Net cashflow: $8/mo
• Annual: $101/yr
• Cap rate: 6.32%
• Cash-on-cash: 0.10%
• DSCR: 1.00
• 1% rule: 0.80%
• Cash to close: $102,900

Investor read

• This is a 4-bed/2.0-bath single-family listed at $368k.
• At list price, monthly cash flow is $8 ($101/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $295k (19.7% below list).
• It's been on market 178 days — a 12% lower offer ($323k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $295k (19.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#127 in MI, #3,163 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: health & safety D, amenities F, commute F.
• Rochester Community School District (suburban): math 60% / reading 69% proficiency, ranked #21 of 540 in MI (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+1.8%/yr); 208 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 3 sale attempts since 28y ago; this cycle's ask has dropped $70k (16%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $186k; list at $368k implies a 97% gain — meaningful room to come down on a strong offer.
• Cap rate 6.3% vs local median 3.2% in Rochester Hills — 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 33% of the median local income ($107k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 178 days. Have you received any prior offers? Is the seller open to a 20% 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 A-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?
• 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.