2071 Linden Ave SE, Grand Rapids, MI 49507 — 22.7% Cash-on-Cash

About this property

2071 Linden Ave SE is a 3-bedroom, 2-bathroom single-family property in Grand Rapids, MI 49507, listed at $235,000 with 1,387 square feet of living area on a 3,920-square-foot lot.

The listing describes a newly constructed home with modern finishes and energy-efficient construction — two factors that matter for an investor because they reduce near-term maintenance exposure and can support premium rents relative to older stock in the same zip code.

There's a structural detail here that demands attention before underwriting: the property is offered through a Community Land Trust arrangement, where the buyer owns the home but leases the land from a nonprofit at roughly $50 per month. That keeps the purchase price well below comparable new construction — the listing notes approximately 25% below market — but it also means the land-lease cost should be factored into operating expenses. The financial figures above should be reviewed against that $50/month land lease, which is not reflected in the HOA line (listed at $0).

Five days on market with no price reduction signals fresh inventory rather than a stale listing. Non-owner-occupied status confirms investor eligibility. The lot at 3,920 square feet is modest, consistent with urban infill construction.

The investment case

At a 22.7% cash-on-cash return against a zip average of 8.2% and a city average of -4.4%, the financial case here is unusually straightforward for a Grand Rapids single-family deal.

List Price

$235,000

Monthly Payment (PITI+HOA)

$1,641

Principal & Interest

$1,204

Property Tax

$359

Insurance

$78

HOA

$0

PMI

$0

Est. Monthly Rent

$2,529

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

22.7%

Cap Rate

12.5%

Monthly Cash Flow

$888

Gross Rent Multiplier

7.7

DSCR

2.0

The numbers start with a $235,000 purchase price financed at the current 30-year fixed rate of 6.55%, producing a principal-and-interest payment of $1,204 per month. Add property taxes ($359), insurance ($78), and the total monthly obligation lands at $1,641. Against an estimated rent of $2,529 per month, that leaves $888 in monthly cash flow before maintenance reserves.

The cap rate of 12.5% on a net operating income of $2,451 per month is well above what institutional buyers typically accept in Midwest single-family markets, where 6-8% cap rates are more common. A debt service coverage ratio of 2.0 means the property generates twice the income needed to cover its debt — a margin that gives an investor meaningful buffer against vacancy or rent softness.

The gross rent multiplier of 7.7 is the most compressed valuation signal here. At the city median listing price of $369,000, you'd need rents in the $3,900 range to hit a comparable GRM. This property doesn't require that math.

The city average cash-on-cash sits at -4.4%, meaning the median Grand Rapids single-family deal is cash-flow negative at 20% down. This property's 22.7% return doesn't just beat the city — it inverts the typical local outcome. Figures exclude depreciation tax benefits, which vary by individual tax situation.

The investment case rests on a below-market purchase price from the CLT structure producing cash-flow metrics that are genuinely rare in this market.

Annual return outlook

The 31.4% total five-year ROI breaks into three components, with cash flow doing the heaviest lifting by a wide margin.

Cash flow accounts for 22.7 percentage points of that 31.4% total — the dominant driver. Mortgage paydown contributes an estimated 4.5 points, reflecting equity accumulation through principal reduction at a DSCR of 2.0. Appreciation adds an estimated 4.2 points annually, though that figure carries an important caveat: it's an estimate rather than a market-observed data point, so it should be treated as a directional input rather than a locked forecast.

The practical implication is that this deal doesn't depend on appreciation to pencil. Even if Grand Rapids home values were flat over five years, the cash flow and paydown components alone would produce a return that outperforms most local alternatives. Appreciation, if it materializes near the estimated 4.2% annual rate, is additive.

One structural consideration for the five-year horizon: the Community Land Trust model limits how much appreciation an owner captures at resale. The listing notes that sellers keep their equity plus a portion of appreciation — the exact share isn't specified in the listing data. An investor modeling a five-year exit should verify the resale formula with the CLT directly, since the appreciation contribution to total ROI may be partially constrained by that agreement.

Cash flow is the engine here; appreciation is a bonus with a CLT-specific ceiling worth understanding before closing.

How it compares to nearby for-sale listings

Five active listings in ZIP 49507 provide a pricing context for 2071 Linden Ave SE, and the spread is wide enough to tell a clear story about where this property sits.

At $235,000, this property is 14.5% below the for-sale comp median of $275,000 across the five comparable listings. On a price-per-square-foot basis, $235,000 across 1,387 square feet works out to roughly $169/sqft. The comp at 111 Fair St SE — also 3 bed/2 bath at 1,464 sqft — lists at $175,000, or about $120/sqft, which is lower, though that property has been on market three days and likely reflects different condition or vintage. The comp at 2515 Eastern Ave SE lists at $365,000 for 1,340 sqft, or $272/sqft — nearly 61% more per square foot than this listing.

New construction in the zip, even through a CLT structure, commands a premium over older stock on a per-square-foot basis, and that's visible here. The $169/sqft figure is competitive given the modern finishes and energy-efficient construction the listing describes.

Days on market across the comp set range from one to four days, consistent with active buyer demand in 49507. At five days, this listing is moving at roughly the same pace as its peers — no red flags from a liquidity standpoint.

Rental demand in this zip

Eleven 3-bedroom rental comps in ZIP 49507 establish a market rent range of $1,500 to $3,100 per month, with a median of $1,895.

11 comparable rentals in ZIP 49507 — median $1,895/mo, range $1,500–$3,100/mo

The estimated rent for this property is $2,529 per month — 33.4% above the 49507 comp median of $1,895. That's a meaningful premium, and it's the number that deserves the most scrutiny in this underwrite.

The comp range runs from $1,500 to $3,100, so $2,529 is achievable within the market — it's not above the ceiling. But it sits in the upper third of the distribution. New construction with modern finishes and energy-efficient systems can command above-median rents, particularly when older rental stock dominates the comp set. That said, an investor should stress-test the cash flow at the median rent of $1,895 before closing. At $1,895, monthly cash flow would compress significantly from the $888 headline figure.

At $1,895 rent against $1,641 in total monthly payments, the property would still produce roughly $254 in monthly cash flow — positive, but a much thinner margin. The DSCR would drop from 2.0 to approximately 1.2, which is still above the conventional 1.0 breakeven threshold but leaves less room for vacancy or maintenance surprises.

The range in the comp set also reflects meaningful variation in unit quality and location within the zip. Verifying that the subject property's rent estimate is supported by direct comparable units — not just zip-wide averages — is the key due-diligence step here.

Who this property suits + risks to weigh

This property suits a cash-flow-focused investor comfortable with CLT resale restrictions and willing to verify the rent premium against ground-level comparable units.

Best fit

An investor prioritizing current income over maximum equity upside is the natural buyer here. The 22.7% cash-on-cash return and $888 monthly cash flow are rare in a city where the average deal runs negative. New construction reduces the near-term capital expenditure risk that typically haunts single-family rentals — no deferred maintenance, no aging mechanical systems. The energy-efficient construction may also reduce tenant utility costs, which can support tenant retention and justify above-median rents.

The low down payment options mentioned in the listing description make this accessible to investors who haven't accumulated a large capital base, though the financial metrics above assume conventional financing terms.

Risks to weigh

The CLT land-lease structure is the primary risk that doesn't appear in the headline metrics. The $50/month land lease cost should be added to operating expenses, which would reduce monthly cash flow from $888 to approximately $838. More significantly, the resale formula — which limits how much appreciation the owner captures — could compress the actual five-year return below the 31.4% projection if the investor plans to exit rather than hold long-term.

The rent estimate at $2,529 sits 33% above the zip median, which is achievable for new construction but not guaranteed. A vacancy period at re-leasing or a rent reset toward the $1,895 median would materially change the return profile. The property is income-qualified for purchase through the CLT, which may also affect the buyer pool at resale and limit exit options to CLT-qualified buyers.

Strong cash flow with a structural ceiling on upside — the right fit for a buy-and-hold investor who models conservatively on rent and understands the CLT resale terms.