706 S Lake St

South Bend, IN 46619

$120,000D

2 bd · 1.0 ba · 672 sqft · Built 1945 · SingleFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,072/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$171
• HOA: −$0
• Vac / Maint / Mgmt: −$225
• Net cashflow: $46/mo
• Annual: $555/yr
• Cap rate: 6.76%
• Cash-on-cash: 1.65%
• DSCR: 1.07
• 1% rule: 0.89%
• Cash to close: $33,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $46 ($555/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $107k (10.7% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $107k (10.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#365 in IN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, employment D, crime F.
• South Bend Community School Corporation (urban): math 12% / reading 21% proficiency, ranked #284 of 301 in IN (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Harrison Elementary School (math 3% / reading 3%, grade F, #988 of 994 statewide, top 99%, 654 students, 91% FRL); Navarre Middle School (math 0% / reading 4%, grade F, #330 of 330 statewide, top 100%, 519 students, 83% FRL); Washington High School (math 12% / reading 42%, grade F, #315 of 369 statewide, top 86%, 834 students, 79% FRL) — zoned schools average 85% FRL vs 66% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 53 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 57% of comp listings sitting > 30 days — soft ceiling on asking rent; 754 units permitted in St. Joseph County in 2024 (460 in 5+ unit buildings).
• Cap rate 6.8% vs local median 4.3% in South Bend — 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

• Built in 1945 — 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.
• 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.