122 State St

Spearfish, SD 57783

$96,000B-

3 bd · 1.0 ba · 896 sqft · Built 2005 · Manufactured · Active · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,903/mo
• Mortgage (P&I): −$503
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$400
• Net cashflow: $840/mo
• Annual: $10,083/yr
• Cap rate: 16.80%
• Cash-on-cash: 37.51%
• DSCR: 2.67
• 1% rule: 1.98%
• Cash to close: $26,880

Investor read

• This is a 3-bed/1.0-bath manufactured listed at $96k. Condition is rated fair.
• At list price, monthly cash flow is $840 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $96k).
• It's been on market 28 days — a 2% lower offer ($95k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $95k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $664 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#83 in SD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A-; Watch: amenities F, commute F.
• Spearfish School District 40-2 (town): math 45% / reading 56% proficiency, ranked #32 of 59 in SD (top 54%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Creekside Elementary - 07 (math 53% / reading 60%, grade C+, #83 of 253 statewide, top 33%, 498 students, 14% FRL); Spearfish Middle School - 05 (math 40% / reading 49%, grade D, #75 of 143 statewide, top 61%, 600 students, 16% FRL); Spearfish High School - 01 (math 37% / reading 72%, grade C-, #53 of 151 statewide, top 41%, 796 students, 9% FRL).
• Market conditions: 291 active listings in the ZIP; 217 units permitted in Lawrence County in 2024 (11 in 5+ unit buildings).
• Lawrence County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 30 sale attempts since 6y 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 (-3.0% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.8% vs local median 2.2% in Spearfish — 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.
• This rent runs 31% of the median local income ($75k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.

Repairs flagged (vision-AI assessment)

• Moderate: Deck — Weathered and needs repainting
• Moderate: Siding — Weathered and needs repainting