1245 Derby Rd #7

Birmingham, MI 48009

$219,000D

2 bd · 1.5 ba · 982 sqft · Built 1960 · Condo · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,061/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$206
• HOA: −$383
• Vac / Maint / Mgmt: −$433
• Net cashflow: $-109/mo
• Annual: $-1,304/yr
• Cap rate: 5.70%
• Cash-on-cash: -2.13%
• DSCR: 0.91
• 1% rule: 0.94%
• Cash to close: $61,320

Investor read

• This is a 2-bed/1.5-bath condo listed at $219k.
• At list price, monthly cash flow is $-109 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $200k (8.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $206k (5.9% below list).
• It's been on market 31 days — a 3% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (8.8% 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 $7k of value loss. Plan a longer hold.
• Location reads 88/100 on livability (#12 in MI, #200 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, amenities A+; Watch: cost of living F.
• Birmingham Public Schools (suburban): math 58% / reading 71% proficiency, ranked #18 of 540 in MI (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 6% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.8%/yr); 208 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 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.
• 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.
• Current owner paid $75k; list at $219k implies a 192% gain — meaningful room to come down on a strong offer.
• Cap rate 5.7% vs local median 1.5% in Birmingham — 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 is only 16% of the median local income ($153k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 31 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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?