565 Collette Ave

Comstock Northwest, MI 49048

$135,000C-

2 bd · 1.0 ba · 1,064 sqft · Built 1962 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,205/mo
• Mortgage (P&I): −$708
• Tax + insurance: −$158
• HOA: −$0
• Vac / Maint / Mgmt: −$253
• Net cashflow: $86/mo
• Annual: $1,034/yr
• Cap rate: 7.06%
• Cash-on-cash: 2.74%
• DSCR: 1.12
• 1% rule: 0.89%
• Cash to close: $37,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $135k.
• At list price, monthly cash flow is $86 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (10.7% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $121k (10.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $933 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#224 in MI) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B; Watch: amenities D, commute F, health & safety F.
• Comstock Public Schools (suburban): math 18% / reading 32% proficiency, ranked #428 of 540 in MI (top 79%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 65% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+7.9%/yr); 154 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 339 units permitted in Kalamazoo County in 2024 (22 in 5+ unit buildings).
• Kalamazoo County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 5y 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 7.1% vs local median 3.6% in Comstock Northwest — 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

• Built in 1962 — 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 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.