3219 Mckinley Ave

South Bend, IN 46615

$165,000D

2 bd · 1.5 ba · 952 sqft · Built 1953 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,292/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$203
• HOA: −$0
• Vac / Maint / Mgmt: −$271
• Net cashflow: $-47/mo
• Annual: $-564/yr
• Cap rate: 5.95%
• Cash-on-cash: -1.22%
• DSCR: 0.95
• 1% rule: 0.78%
• Cash to close: $46,200

Investor read

• This is a 2-bed/1.5-bath single-family listed at $165k.
• At list price, monthly cash flow is $-47 ($-564/yr) — negative.
• To cash-flow at today's rent, offer at most $157k (5.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $129k (21.7% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $129k (21.7% 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 $5k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, crime F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Edison Middle School (math 7% / reading 13%, grade F, #314 of 330 statewide, top 95%, 381 students, 84% FRL); Adams High School (math 28% / reading 57%, grade F, #195 of 369 statewide, top 53%, 1,976 students, 56% FRL) — zoned schools at 70% FRL track the district average.
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.3%/yr); 73 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• 2 sale attempts since 3y 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.
• Cap rate 6.0% vs local median 4.4% in South Bend — 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

• 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 1953 — 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 F-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?
• 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.