Gladstone Plan

Billings, MT 59102

$168,000F

2 bd · 1.0 ba · 1,092 sqft · Built — · Townhouse · Active · 802 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,793/mo
• Mortgage (P&I): −$1,414
• Tax + insurance: −$450
• HOA: −$0
• Vac / Maint / Mgmt: −$377
• Net cashflow: $-447/mo
• Annual: $-5,367/yr
• Cap rate: 4.30%
• Cash-on-cash: -7.11%
• DSCR: 0.68
• 1% rule: 0.66%
• Cash to close: $75,523

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $168k.
• At list price, monthly cash flow is $-447 ($-5k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $168k).
• It's been on market 802 days — a 12% lower offer ($148k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $148k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#10 in MT, #1,830 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: schools D+, crime F.
• Billings H S (urban): math 29% / reading 45% proficiency, ranked #69 of 116 in MT (top 60%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+5.0%/yr); 197 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,401 units permitted in Yellowstone County in 2024 (281 in 5+ unit buildings).
• Yellowstone County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.3% vs local median 3.0% in Billings — 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 802 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 D-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.