714 NW 3rd St St

Madison, SD 57042

$104,900B

3 bd · 1.0 ba · 1,097 sqft · Built 1914 · SingleFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,548/mo
• Mortgage (P&I): −$550
• Tax + insurance: −$137
• HOA: −$0
• Vac / Maint / Mgmt: −$325
• Net cashflow: $536/mo
• Annual: $6,428/yr
• Cap rate: 12.42%
• Cash-on-cash: 21.88%
• DSCR: 1.97
• 1% rule: 1.48%
• Cash to close: $29,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $105k.
• At list price, monthly cash flow is $536 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $105k).
• It's been on market 54 days — a 3% lower offer ($102k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $102k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $725 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#26 in SD, #3,922 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Madison Central School District 39-2 (town): math 41% / reading 55% proficiency, ranked #36 of 59 in SD (top 61%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 130 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 35 units permitted in Lake County in 2024 (0 in 5+ unit buildings).
• Lake County population projected at +32% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 5y 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.
• Current owner paid $78k; 35% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $29k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 12.4% vs local median 2.8% in Madison — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 54 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1914 — 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.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.