Investment Summary
The asset is part of the 29 Pack Portfolio, with a standardized purchase price of $52,000. It stands to generate a cash flow of approximately $519 per month, with an estimated 10%~ cash-on-cash return at full occupancy during the first year.
- Purchase Price: $52,000
- Total Basis: $62,010
- Projected CapEx: $10,000
- Rent at Acquisition: $725
- Projected Rent: $900
- Estimated Monthly Cash Flow: $519
At the time of acquisition, the property was already tenant-occupied at $725 per month, providing immediate income. Based on market rents in the surrounding area, we project stabilization at approximately $900 per month. The tenant is a Section 8 tenant, which reduces collection risk, making it a more predictable income-producing asset.
The home is durable brick construction and a functional layout suited for long-term tenants. The home is in reasonable condition, but our crew will go in to fix some windows and soffits.
The property is located in the Morningside area, directly adjacent to East English Village, one of Detroit’s most desirable residential pockets. The neighborhood is characterized by strong rental demand and a concentration of brick single-family homes due tro its proximity to Grosse Pointe.
Recent market data indicates that average home prices in the area are now approaching $100,000, and Zillow data suggests approximately 12% price growth over the past year, reinforcing both rental stability and long-term appreciation potential.
This property is being estimated as having a value of $82,600 as is. Comparable sales in nearby streets include the below.
3935 Somerset Ave, Detroit, MI: Sold for $138,000
4135 Somerset Ave, Detroit, MI: Sold for $120,000
These comparable prices reflect vacant and improved ready-to-move-in properties.
The subject property will not match these finishes in its current state, and our underwriting accounts for the tenant-occupied condition. Once the tenant leaves, we expect to spend several thousand dollars to bring this property to match the finishes with the comparable listings mentioned above.
However, even with these conservative assumptions, the valuation gap supports meaningful embedded equity of about $20,000, or about 30% equity.