614 S 2nd Ave Ave

Sioux Falls, SD 57104

$219,900D

3 bd · 5.0 ba · 2,265 sqft · Built 1890 · Other · Active · 90 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,683/mo
• Mortgage (P&I): −$1,153
• Tax + insurance: −$401
• HOA: −$0
• Vac / Maint / Mgmt: −$353
• Net cashflow: $-225/mo
• Annual: $-2,702/yr
• Cap rate: 5.06%
• Cash-on-cash: -4.39%
• DSCR: 0.80
• 1% rule: 0.77%
• Cash to close: $61,572

Investor read

• This is a 3-bed/5.0-bath other listed at $220k.
• At list price, monthly cash flow is $-225 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $180k (18.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $168k (23.5% below list).
• It's been on market 90 days — a 6% lower offer ($207k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $168k (23.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#3 in SD, #610 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F.
• Sioux Falls School District 49-5 (urban): math 39% / reading 48% proficiency, ranked #45 of 59 in SD (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Susan B. Anthony Elementary - 66 (math 40% / reading 40%, grade F, #165 of 253 statewide, top 65%, 555 students, 43% FRL); Patrick Henry Middle School - 07 (math 42% / reading 53%, grade C-, #69 of 143 statewide, top 48%, 940 students, 24% FRL); Lincoln High School - 02 (math 48% / reading 71%, grade C+, #31 of 151 statewide, top 32%, 1,883 students, 22% FRL).
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.0%/yr); 155 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 2,425 units permitted in Minnehaha County in 2024 (1,367 in 5+ unit buildings).
• Minnehaha County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 11y 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 $130k; list at $220k implies a 69% gain — meaningful room to come down on a strong offer.
• Cap rate 5.1% vs local median 2.6% in Sioux Falls — 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 35% of the median local income ($58k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 90 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• Built in 1890 — 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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?