256 W Chicago Ave

Pontiac, MI 48340

$159,900C

3 bd · 3.0 ba · 2,580 sqft · Built 1967 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,802/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$347
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $238/mo
• Annual: $2,851/yr
• Cap rate: 8.08%
• Cash-on-cash: 6.37%
• DSCR: 1.28
• 1% rule: 1.13%
• Cash to close: $44,772

Investor read

• This is a 3-bed/3.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $238 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $160k).
• Only 11 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 $5k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#499 in MI) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: health & safety D, schools F, crime F.
• Pontiac City School District (urban): math 8% / reading 17% proficiency, ranked #514 of 540 in MI (top 95%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+4.7%/yr); 83 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 2,614 units permitted in Oakland County in 2024 (721 in 5+ unit buildings).
• Oakland County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 11 sale attempts since 24y 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 8.1% vs local median 6.7% in Pontiac — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $1,802/mo this rent would consume 45% of the median local household income ($48k/yr) (locally 1460% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1967 — 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?
• 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.