109 Sherman

Newton, KS 67114

$165,000F

3 bd · 2.0 ba · 1,512 sqft · Built 1952 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,117/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$348
• HOA: −$0
• Vac / Maint / Mgmt: −$234
• Net cashflow: $-332/mo
• Annual: $-3,979/yr
• Cap rate: 3.88%
• Cash-on-cash: -8.61%
• DSCR: 0.62
• 1% rule: 0.68%
• Cash to close: $46,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-332 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $106k (35.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $112k (32.3% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $106k (35.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#282 in KS) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety B+; Watch: crime F, amenities F, commute F.
• Newton (town): math 17% / reading 30% proficiency, ranked #141 of 169 in KS (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Slate Creek Elementary (math 27% / reading 27%, grade F, #507 of 684 statewide, top 78%, 267 students, 55% FRL); Chisholm Middle School (math 14% / reading 25%, grade F, #152 of 219 statewide, top 72%, 489 students, 58% FRL); Newton Sr High (math 11% / reading 26%, grade F, #232 of 327 statewide, top 71%, 956 students, 51% FRL).
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+18.1%/yr); 135 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 148 units permitted in Harvey County in 2024 (13 in 5+ unit buildings).
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1952 — 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?
• 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?
• 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.