27377 Palmer Blvd

Madison Heights, MI 48071

$189,900D

3 bd · 1.0 ba · 910 sqft · Built 1955 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,755/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$311
• HOA: −$0
• Vac / Maint / Mgmt: −$369
• Net cashflow: $80/mo
• Annual: $959/yr
• Cap rate: 6.80%
• Cash-on-cash: 1.80%
• DSCR: 1.08
• 1% rule: 0.92%
• Cash to close: $53,172

Investor read

• This is a 3-bed/1.0-bath single-family listed at $190k.
• At list price, monthly cash flow is $80 ($959/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 $176k (7.6% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $176k (7.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#62 in MI, #1,347 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety D.
• Madison District Public Schools (suburban): math 9% / reading 21% proficiency, ranked #502 of 540 in MI (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 70% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Madison Elementary School (math 12% / reading 17%, grade F, #1,185 of 1,397 statewide, top 86%, 337 students, 79% FRL); Wilkinson Middle School (math 8% / reading 17%, grade F, #466 of 493 statewide, top 95%, 189 students, 80% FRL); Madison High School (math 5% / reading 34%, grade F, #611 of 713 statewide, top 87%, 269 students, 78% FRL).
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.8%/yr); 141 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 10 sale attempts since 21y 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 $130k; 46% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• This rent runs 30% of the median local income ($70k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1955 — 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?
• 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.