20201 Lochmoor St

Harper Woods, MI 48225

$189,000D

3 bd · 1.0 ba · 988 sqft · Built 1952 · SingleFamily · Active · 139 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,491/mo
• Mortgage (P&I): −$991
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$313
• Net cashflow: $-82/mo
• Annual: $-988/yr
• Cap rate: 5.77%
• Cash-on-cash: -1.87%
• DSCR: 0.92
• 1% rule: 0.79%
• Cash to close: $52,920

Investor read

• This is a 3-bed/1.0-bath single-family listed at $189k.
• At list price, monthly cash flow is $-82 ($-988/yr) — negative.
• To cash-flow at today's rent, offer at most $174k (7.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $149k (21.1% below list).
• It's been on market 139 days — a 12% lower offer ($166k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $149k (21.1% 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 73/100 on livability (#199 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment D+, health & safety D+, crime F.
• Grosse Pointe Public Schools (suburban): math 56% / reading 68% proficiency, ranked #24 of 540 in MI (top 4%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Zoned schools: Parcells Middle School (math 43% / reading 56%, grade C, #127 of 493 statewide, top 26%, 677 students, 36% FRL); Grosse Pointe North High School (math 45% / reading 73%, grade C+, #87 of 713 statewide, top 12%, 1,081 students, 31% FRL) — zoned schools average 33% FRL vs 13% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 134 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 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.
• 6 sale attempts since 3y ago; this cycle's ask has dropped $11k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $160k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.8% vs local median 7.7% in Harper Woods — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 139 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Built in 1952 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• Crime grade is F 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?