405 NW 4th St

Watford City, ND 58854

$194,000D

3 bd · 2.0 ba · 1,920 sqft · Built 1977 · Other · Active · 140 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,595/mo
• Mortgage (P&I): −$1,017
• Tax + insurance: −$238
• HOA: −$0
• Vac / Maint / Mgmt: −$335
• Net cashflow: $5/mo
• Annual: $66/yr
• Cap rate: 6.33%
• Cash-on-cash: 0.12%
• DSCR: 1.01
• 1% rule: 0.82%
• Cash to close: $54,320

Investor read

• This is a 3-bed/2.0-bath other listed at $194k.
• At list price, monthly cash flow is $5 ($66/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $160k (17.8% below list).
• It's been on market 140 days — a 12% lower offer ($171k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $160k (17.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#39 in ND) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: schools D+, amenities F, commute F.
• Mckenzie County 1 (rural): math 33% / reading 36% proficiency, ranked #34 of 53 in ND (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 179 active listings in the ZIP; solid renter incomes; 38 units permitted in McKenzie County in 2024 (0 in 5+ unit buildings).
• McKenzie County population projected at +180% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 7y ago; this cycle's ask has dropped $110k (36%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $165k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 2.5% in Watford City — 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 140 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1977 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.