4140 Michigan Ave

St. Louis, MO 63118

$184,000C

4 bd · 2.0 ba · 2,728 sqft · Built 1908 · MultiFamily · Active · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,278/mo
• Mortgage (P&I): −$965
• Tax + insurance: −$115
• HOA: −$0
• Vac / Maint / Mgmt: −$478
• Net cashflow: $720/mo
• Annual: $8,638/yr
• Cap rate: 10.99%
• Cash-on-cash: 16.77%
• DSCR: 1.75
• 1% rule: 1.24%
• Cash to close: $51,520

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $184k.
• At list price, monthly cash flow is $720 ($9k/yr) — positive. Per door: $360/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $184k).
• Only 4 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 $6k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• St. Louis City (urban): math 10% / reading 18% proficiency, ranked #312 of 324 in MO (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Meramec Elem. (math 2% / reading 8%, grade F, #1,072 of 1,115 statewide, top 98%, 202 students, 98% FRL); Roosevelt High (math 2% / reading 8%, grade F, #517 of 521 statewide, top 100%, 460 students, 99% FRL) — zoned schools average 99% FRL vs 80% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.9%/yr); 240 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); 294 units permitted in St. Louis city in 2024 (227 in 5+ unit buildings).
• St. Louis County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $148k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 4.9% rent growth), your $52k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.0% vs local median 5.0% in St. Louis — 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.
• At $2,278/mo this rent would consume 47% of the median local household income ($58k/yr) (locally 1495% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1908 — 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.
• 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.