120 N Farmer St

Otsego, MI 49078

$375,000B-

15 bd · 25.0 ba · 3,944 sqft · Built 1870 · MultiFamily · Active · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,380/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$625
• HOA: −$0
• Vac / Maint / Mgmt: −$1,130
• Net cashflow: $1,659/mo
• Annual: $19,904/yr
• Cap rate: 11.60%
• Cash-on-cash: 18.96%
• DSCR: 1.84
• 1% rule: 1.43%
• Cash to close: $105,000

Investor read

• This is a 1×1bd/1ba + 1×2bd/1ba + 3×3bd/1ba units multifamily listed at $375k.
• At list price, monthly cash flow is $2k ($20k/yr) — positive. Per door: $332/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $375k).
• It's been on market 62 days — a 6% lower offer ($352k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $352k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#216 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools A-; Watch: employment D+, amenities F, commute F.
• Otsego Public Schools (town): math 39% / reading 57% proficiency, ranked #118 of 540 in MI (top 22%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1870 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 76 active listings in the ZIP; 419 units permitted in Allegan County in 2024 (0 in 5+ unit buildings).
• 12 sale attempts since 19y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $105k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.6% vs local median 1.8% in Otsego — 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

• It's been on market 62 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1870 — 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 A-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?
• 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.