905 N Franklin St

Red Cloud, NE 68970

$165,000D

3 bd · 2.0 ba · 1,680 sqft · Built 1962 · SingleFamily · Pending · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,222/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$154
• HOA: −$0
• Vac / Maint / Mgmt: −$257
• Net cashflow: $-54/mo
• Annual: $-650/yr
• Cap rate: 5.90%
• Cash-on-cash: -1.41%
• DSCR: 0.94
• 1% rule: 0.74%
• 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 $-54 ($-650/yr) — negative.
• To cash-flow at today's rent, offer at most $155k (5.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $122k (25.9% below list).
• It's been on market 65 days — a 6% lower offer ($155k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (25.9% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($1k loan paydown + $6k appreciation (3.5% local appreciation)).
• Location reads 74/100 on livability (#121 in NE, #4,675 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Red Cloud Community Schools (rural): math 40% / reading 40% proficiency, ranked #219 of 245 in NE (top 89%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Red Cloud Elementary School (math 47% / reading 37%, grade F, #319 of 502 statewide, top 68%, 163 students, 58% FRL); Red Cloud High School (math 44% / reading 44%, grade F, #146 of 261 statewide, top 67%, 106 students, 46% FRL).
• Market conditions: 7 active listings in the ZIP; 2 units permitted in Webster County in 2024 (0 in 5+ unit buildings).
• Webster County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 2y 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.
• Current owner paid $74k; list at $165k implies a 124% gain — meaningful room to come down on a strong offer.
• At projected returns (3.5% appreciation + 3.0% rent growth), your $46k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 65 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1962 — 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.
• 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.