509 S 1st Ave Unit 511 S 1st Ave

Escanaba, MI 49829

$175,000B+

7 bd · 3.0 ba · 2,922 sqft · Built 1902 · MultiFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,995/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$292
• HOA: −$0
• Vac / Maint / Mgmt: −$629
• Net cashflow: $1,157/mo
• Annual: $13,880/yr
• Cap rate: 14.22%
• Cash-on-cash: 28.33%
• DSCR: 2.26
• 1% rule: 1.71%
• Cash to close: $49,000

Investor read

• This is a 7-bed/3.0-bath multifamily listed at $175k. Condition is rated fair.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $175k).
• Only 13 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 75/100 on livability (#161 in MI, #4,089 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, housing A+; Watch: crime D+, commute F, employment F.
• Escanaba Area Public Schools (town): math 31% / reading 46% proficiency, ranked #243 of 540 in MI (top 45%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lemmer Elementary School (283 students, 62% FRL); Escanaba Upper Elementary (math 33% / reading 44%, grade F, #675 of 1,397 statewide, top 48%, 436 students, 53% FRL); Escanaba Juniorsenior High School (math 30% / reading 48%, grade F, #328 of 713 statewide, top 46%, 1,100 students, 44% FRL).
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 66 active listings in the ZIP; 38 units permitted in Delta County in 2024 (0 in 5+ unit buildings).
• Delta County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.2% vs local median 4.9% in Escanaba — 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.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1902 — 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 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?
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — severe peeling
• Major: interior paint — extensive peeling
• Major: flooring — damaged and outdated
• Moderate: kitchen cabinets — outdated and worn
• Moderate: bathroom fixtures — dated and worn