2014 11th Ave SW

Watertown, SD 57201

$89,900C+

3 bd · 2.0 ba · 1,120 sqft · Built 1995 · SingleFamily · Active · 186 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,340/mo
• Mortgage (P&I): −$471
• Tax + insurance: −$56
• HOA: −$0
• Vac / Maint / Mgmt: −$281
• Net cashflow: $531/mo
• Annual: $6,377/yr
• Cap rate: 13.39%
• Cash-on-cash: 25.33%
• DSCR: 2.13
• 1% rule: 1.49%
• Cash to close: $25,172

Investor read

• This is a 3-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $531 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• It's been on market 186 days — a 12% lower offer ($79k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#11 in SD, #2,681 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Watertown School District 14-4 (town): math 45% / reading 57% proficiency, ranked #28 of 59 in SD (top 48%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 228 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 160 units permitted in Codington County in 2024 (63 in 5+ unit buildings).
• Codington County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 12y ago; this cycle's ask has dropped $5k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.4% vs local median 2.3% in Watertown — 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 186 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 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 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.