107 5th Ave NW

Watertown, SD 57201

$170,000C+

6 bd · 2.5 ba · 2,892 sqft · Built 1915 · SingleFamily · Active · 88 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,761/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$249
• HOA: −$0
• Vac / Maint / Mgmt: −$370
• Net cashflow: $251/mo
• Annual: $3,007/yr
• Cap rate: 8.06%
• Cash-on-cash: 6.32%
• DSCR: 1.28
• 1% rule: 1.04%
• Cash to close: $47,600

Investor read

• This is a 6-bed/2.5-bath single-family listed at $170k.
• At list price, monthly cash flow is $251 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $170k).
• It's been on market 88 days — a 6% lower offer ($160k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $160k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#11 in SD, #2,681 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Watertown School District 14-4 (town): math 45% / reading 57% proficiency, ranked #28 of 59 in SD (top 48%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 228 active listings in the ZIP; 160 units permitted in Codington County in 2024 (63 in 5+ unit buildings).
• Codington County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Cap rate 8.1% vs local median 2.3% in Watertown — 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 88 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1915 — 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 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.