511 -517 Main St S St S

Lennox, SD 57039

$325,000B+

8 bd · 4.8 ba · 4,372 sqft · Built 1969 · MultiFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,500/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$542
• HOA: −$0
• Vac / Maint / Mgmt: −$945
• Net cashflow: $1,309/mo
• Annual: $15,708/yr
• Cap rate: 11.13%
• Cash-on-cash: 17.26%
• DSCR: 1.77
• 1% rule: 1.38%
• Cash to close: $91,000

Investor read

• This is a 4 × 2-bed/1.2-bath units multifamily listed at $325k. Condition is rated average.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $327/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $325k).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#50 in SD) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety D-.
• Lennox School District 41-4 (rural): math 56% / reading 64% proficiency, ranked #5 of 59 in SD (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 12% free/reduced lunch — higher-income household profile.
• Zoned schools: Lennox Elementary - 02 (math 72% / reading 67%, grade A-, #19 of 253 statewide, top 12%, 369 students, 16% FRL); Lennox Jr. High - 08 (math 57% / reading 67%, grade B+, #13 of 143 statewide, top 11%, 189 students, 15% FRL); Lennox High School - 01 (math 32% / reading 77%, grade C-, #53 of 151 statewide, top 41%, 359 students, 14% FRL) — zoned schools at 15% FRL track the district average.
• Market conditions: 56 active listings in the ZIP; 232 units permitted in Lincoln County in 2024 (14 in 5+ unit buildings).
• Lincoln County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $91k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.1% vs local median 1.8% in Lennox — 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

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1969 — 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and in need of replacement
• Moderate: bathroom fixtures — dated and in need of replacement
• Minor: HVAC system — may need cleaning or minor repairs