406 5th Ave SW

Surrey, ND 58785

$150,000C

3 bd · 2.0 ba · 2,632 sqft · Built 1979 · SingleFamily · Pending · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,500/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$133
• HOA: −$0
• Vac / Maint / Mgmt: −$315
• Net cashflow: $265/mo
• Annual: $3,183/yr
• Cap rate: 8.42%
• Cash-on-cash: 7.58%
• DSCR: 1.34
• 1% rule: 1.00%
• Cash to close: $42,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $265 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $150k).
• It's been on market 105 days — a 9% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (9.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($1k loan paydown + $493 appreciation (0.3% local appreciation)).
• Location reads 66/100 on livability (#167 in ND) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment B+; Watch: schools D, amenities F, commute F.
• Surrey 41 (rural): math 28% / reading 36% proficiency, ranked #36 of 53 in ND (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: 15 active listings in the ZIP; 123 units permitted in Ward County in 2024 (0 in 5+ unit buildings).
• Ward County population projected at +76% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts 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.
• Current owner paid $6k; list at $150k implies a 2400% gain — meaningful room to come down on a strong offer.
• At projected returns (0.3% appreciation + 3.0% rent growth), your $42k cash investment doubles in ~7 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 105 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1979 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.