1824 Westgate Ave

Royal Oak, MI 48073

$300,000D+

3 bd · 2.0 ba · 1,834 sqft · Built 1949 · SingleFamily · Active · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,417/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$469
• HOA: −$0
• Vac / Maint / Mgmt: −$508
• Net cashflow: $-133/mo
• Annual: $-1,593/yr
• Cap rate: 5.76%
• Cash-on-cash: -1.90%
• DSCR: 0.92
• 1% rule: 0.81%
• Cash to close: $84,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $300k.
• At list price, monthly cash flow is $-133 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $277k (7.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $242k (19.4% below list).
• It's been on market 28 days — a 2% lower offer ($296k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $242k (19.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#50 in MI, #1,020 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, employment A+; Watch: amenities D+.
• Royal Oak Schools (suburban): math 41% / reading 59% proficiency, ranked #89 of 540 in MI (top 16%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 20% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.4%/yr); 251 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 6 sale attempts since 15y 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 $185k; list at $300k implies a 62% gain — meaningful room to come down on a strong offer.
• Cap rate 5.8% vs local median 3.8% in Royal Oak — 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 32% of the median local income ($92k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1949 — 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?
• 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.