708 5th Ave W

Lemmon, SD 57638

$119,000D

3 bd · 1.0 ba · 1,128 sqft · Built 1948 · SingleFamily · Active · 85 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,041/mo
• Mortgage (P&I): −$624
• Tax + insurance: −$193
• HOA: −$0
• Vac / Maint / Mgmt: −$219
• Net cashflow: $5/mo
• Annual: $62/yr
• Cap rate: 6.34%
• Cash-on-cash: 0.18%
• DSCR: 1.01
• 1% rule: 0.87%
• Cash to close: $33,320

Investor read

• This is a 3-bed/1.0-bath single-family listed at $119k.
• At list price, monthly cash flow is $5 ($62/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $104k (12.5% below list).
• It's been on market 85 days — a 6% lower offer ($112k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (12.5% below list) — sets the bar for 1% rule.
• In year one you build about $3k of equity ($823 loan paydown + $3k appreciation (2.2% local appreciation)).
• Location reads 79/100 on livability (#8 in SD, #2,009 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools C-, health & safety D+, amenities D.
• Lemmon School District 52-4 (rural): math 50% / reading 55% proficiency, ranked #60 of 148 in SD (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 20 active listings in the ZIP.
• Perkins County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 3y 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.
• At projected returns (2.2% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~8 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 wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 85 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1948 — 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.
• 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.