713 2nd Ave N

Lake Norden, SD 57248

$155,000D

3 bd · 1.0 ba · 874 sqft · Built 1930 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,200/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $-124/mo
• Annual: $-1,483/yr
• Cap rate: 5.34%
• Cash-on-cash: -3.42%
• DSCR: 0.85
• 1% rule: 0.77%
• Cash to close: $43,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $155k.
• At list price, monthly cash flow is $-124 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $137k (11.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $120k (22.6% below list).
• It's been on market 21 days — a 2% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $120k (22.6% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 65/100 on livability (#142 in SD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, crime D+, amenities F.
• Hamlin School District 28-3 (rural): math 55% / reading 51% proficiency, ranked #18 of 59 in SD (top 30%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Hamlin Elementary - 09 (math 62% / reading 57%, grade B-, #56 of 253 statewide, top 29%, 451 students, 35% FRL); Hamlin Middle School - 02 (math 47% / reading 42%, grade D, #75 of 143 statewide, top 61%, 186 students, 30% FRL); Hamlin High School - 01 (math 54% / reading 64%, grade C+, #31 of 151 statewide, top 32%, 233 students, 23% FRL) — zoned schools at 29% FRL track the district average.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 11 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 56 units permitted in Hamlin County in 2024 (5 in 5+ unit buildings).
• Hamlin County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• By year 3, paydown + projected appreciation supports a ~$42k 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?
• Built in 1930 — 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 D 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.