4500 Katherine St

Dearborn Heights, MI 48125

$159,700D+

3 bd · 1.0 ba · 1,328 sqft · Built 1941 · SingleFamily · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,666/mo
• Mortgage (P&I): −$837
• Tax + insurance: −$423
• HOA: −$0
• Vac / Maint / Mgmt: −$350
• Net cashflow: $55/mo
• Annual: $664/yr
• Cap rate: 6.71%
• Cash-on-cash: 1.49%
• DSCR: 1.07
• 1% rule: 1.04%
• Cash to close: $44,716

Investor read

• This is a 3-bed/1.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $55 ($664/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $160k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#82 in MI, #1,885 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime D+, employment D+, health & safety D+.
• Dearborn Heights School District #7 (suburban): math 13% / reading 26% proficiency, ranked #466 of 540 in MI (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Oakley W Best Middle School (math 12% / reading 31%, grade F, #415 of 493 statewide, top 85%, 586 students, 82% FRL); Annapolis High School (math 12% / reading 32%, grade F, #582 of 713 statewide, top 83%, 748 students, 77% FRL) — zoned schools average 79% FRL vs 60% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.7% of price; built in 1941 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.0%/yr); 139 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); 2,639 units permitted in Wayne County in 2024 (1,216 in 5+ unit buildings).
• Wayne County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 13 sale attempts since 16y ago 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 $115k; 39% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.7% vs local median 5.5% in Dearborn Heights — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 33% of the median local income ($60k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1941 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is D 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?
• 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.
• 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.