3877 E Highway 32

Salem, MO 65560

$117,500D+

3 bd · 2.0 ba · 1,280 sqft · Built 1998 · SingleFamily · Pending · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $890/mo
• Mortgage (P&I): −$616
• Tax + insurance: −$196
• HOA: −$0
• Vac / Maint / Mgmt: −$187
• Net cashflow: $-109/mo
• Annual: $-1,303/yr
• Cap rate: 5.18%
• Cash-on-cash: -3.96%
• DSCR: 0.82
• 1% rule: 0.76%
• Cash to close: $32,900

Investor read

• This is a 3-bed/2.0-bath single-family listed at $118k.
• At list price, monthly cash flow is $-109 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $102k (13.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $89k (24.2% below list).
• It's been on market 43 days — a 3% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (24.2% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($812 loan paydown + $7k appreciation (5.7% local appreciation)).
• Location reads 69/100 on livability (#157 in MO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, crime B; Watch: amenities C-, commute F, employment F.
• Salem R-80 (town): math 25% / reading 41% proficiency, ranked #253 of 324 in MO (top 78%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Wm. H. Lynch Elem. (247 students, 50% FRL); Salem Sr. High (math 8% / reading 47%, grade F, #417 of 521 statewide, top 80%, 616 students, 46% FRL) — zoned schools at 48% FRL track the district average.
• Market conditions: 169 active listings in the ZIP; 3 units permitted in Dent County in 2024 (0 in 5+ unit buildings).
• Dent County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 4y 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.
• By year 5, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.2% vs local median 2.7% in Salem — 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

• 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 43 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• 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.
• 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.