501 S Water St

Gallatin, MO 64640

$94,000C+

2 bd · 3.0 ba · 982 sqft · Built 1925 · Other · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $889/mo
• Mortgage (P&I): −$493
• Tax + insurance: −$69
• HOA: −$0
• Vac / Maint / Mgmt: −$187
• Net cashflow: $141/mo
• Annual: $1,688/yr
• Cap rate: 8.09%
• Cash-on-cash: 6.41%
• DSCR: 1.29
• 1% rule: 0.95%
• Cash to close: $26,320

Investor read

• This is a 2-bed/3.0-bath other listed at $94k.
• At list price, monthly cash flow is $141 ($2k/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 $89k (5.4% below list).
• It's been on market 30 days — a 2% lower offer ($93k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (5.4% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($650 loan paydown + $9k appreciation (10.0% local appreciation)).
• Location reads 61/100 on livability (#426 in MO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: schools D+, amenities F, commute F.
• Gallatin R-V (rural): math 47% / reading 48% proficiency, ranked #66 of 324 in MO (top 20%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 125 active listings in the ZIP.
• Daviess County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 24y 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 (10.0% appreciation + 3.0% rent growth), your $26k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1925 — 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 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?
• 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.