204 7th Ave W

Lemmon, SD 57638

$129,900D+

4 bd · 2.0 ba · 848 sqft · Built 1949 · SingleFamily · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $981/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$127
• HOA: −$0
• Vac / Maint / Mgmt: −$206
• Net cashflow: $-33/mo
• Annual: $-398/yr
• Cap rate: 5.99%
• Cash-on-cash: -1.09%
• DSCR: 0.95
• 1% rule: 0.75%
• Cash to close: $36,372

Investor read

• This is a 4-bed/2.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $-33 ($-398/yr) — negative.
• To cash-flow at today's rent, offer at most $124k (4.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $98k (24.5% below list).
• It's been on market 24 days — a 2% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $98k (24.5% below list) — sets the bar for 1% rule.
• In year one you build about $4k of equity ($898 loan paydown + $3k appreciation (2.2% local appreciation)).
• Location reads 79/100 on livability (#8 in SD, #2,009 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools C-, health & safety D+, amenities D.
• Lemmon School District 52-4 (rural): math 50% / reading 55% proficiency, ranked #60 of 148 in SD (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 20 active listings in the ZIP.
• Perkins County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y 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.
• At projected returns (2.2% appreciation + 3.0% rent growth), your $36k cash investment doubles in ~8 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$32k 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.

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 1949 — 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.
• 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.