202 N Main St

Velva, ND 58790

$139,900D

2 bd · 1.5 ba · 1,736 sqft · Built 1949 · Other · Pending · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,036/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$217
• Net cashflow: $-75/mo
• Annual: $-906/yr
• Cap rate: 5.65%
• Cash-on-cash: -2.31%
• DSCR: 0.90
• 1% rule: 0.74%
• Cash to close: $39,172

Investor read

• This is a 2-bed/1.5-bath other listed at $140k.
• At list price, monthly cash flow is $-75 ($-906/yr) — negative.
• To cash-flow at today's rent, offer at most $127k (9.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $104k (26.0% below list).
• It's been on market 40 days — a 3% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (26.0% below list) — sets the bar for 1% rule.
• In year one you build about $3k of equity ($967 loan paydown + $2k appreciation (1.7% local appreciation)).
• Location reads 71/100 on livability (#65 in ND) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety D-.
• Velva 1 (rural): math 48% / reading 45% proficiency, ranked #18 of 53 in ND (top 34%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 8 active listings in the ZIP; 8 units permitted in McHenry County in 2024 (0 in 5+ unit buildings).
• McHenry County population projected at +57% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 12y ago; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $85k; list at $140k implies a 65% gain — meaningful room to come down on a strong offer.
• At projected returns (1.7% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~10 years — after that, you're playing with house money.
• By year 10, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 40 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1949 — 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.