120 Franklin St

Vermillion, SD 57069

$179,900F

3 bd · 1.0 ba · 1,488 sqft · Built 1900 · Other · Active · 149 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,310/mo
• Mortgage (P&I): −$943
• Tax + insurance: −$256
• HOA: −$0
• Vac / Maint / Mgmt: −$275
• Net cashflow: $-165/mo
• Annual: $-1,978/yr
• Cap rate: 5.19%
• Cash-on-cash: -3.93%
• DSCR: 0.83
• 1% rule: 0.73%
• Cash to close: $50,372

Investor read

• This is a 3-bed/1.0-bath other listed at $180k.
• At list price, monthly cash flow is $-165 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $151k (16.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $131k (27.2% below list).
• It's been on market 149 days — a 12% lower offer ($158k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (27.2% 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 $5k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#5 in SD, #757 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F, employment F.
• Vermillion School District 13-1 (town): math 44% / reading 61% proficiency, ranked #27 of 59 in SD (top 46%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 120 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 28 units permitted in Clay County in 2024 (10 in 5+ unit buildings).
• Clay County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 3y ago; this cycle's ask has dropped $10k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $155k; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.2% vs local median 2.5% in Vermillion — 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 149 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 A-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?
• 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.