426 3rd St

Hugo, CO 80821

$135,000C-

2 bd · 1.0 ba · 1,485 sqft · Built 1920 · SingleFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,084/mo
• Mortgage (P&I): −$708
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$228
• Net cashflow: $-8/mo
• Annual: $-98/yr
• Cap rate: 6.22%
• Cash-on-cash: -0.26%
• DSCR: 0.99
• 1% rule: 0.80%
• Cash to close: $37,800

Investor read

• This is a 2-bed/1.0-bath single-family listed at $135k.
• At list price, monthly cash flow is $-8 ($-98/yr) — negative.
• To cash-flow at today's rent, offer at most $134k (1.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $108k (19.7% below list).
• It's been on market 37 days — a 3% lower offer ($131k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $108k (19.7% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($933 loan paydown + $9k appreciation (6.7% local appreciation)).
• Location reads 73/100 on livability (#42 in CO, #4,990 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment C-, schools F, amenities F.
• Genoa-Hugo School District No. C-113 (rural): math 20% / reading 25% proficiency, ranked #143 of 176 in CO (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 11 active listings in the ZIP; 8 units permitted in Lincoln County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts 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 $75k; list at $135k implies a 80% gain — meaningful room to come down on a strong offer.
• At projected returns (6.7% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 37 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.