234 E Philadelphia St

Rapid City, SD 57701

$129,900D

2 bd · 2.0 ba · 1,152 sqft · Built 1973 · Townhouse · Active · 222 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,138/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$216
• HOA: −$0
• Vac / Maint / Mgmt: −$239
• Net cashflow: $1/mo
• Annual: $12/yr
• Cap rate: 6.30%
• Cash-on-cash: 0.03%
• DSCR: 1.00
• 1% rule: 0.88%
• Cash to close: $36,372

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $130k.
• At list price, monthly cash flow is $1 ($12/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 $114k (12.4% below list).
• It's been on market 222 days — a 12% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (12.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $898 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#34 in SD, #4,720 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F.
• Rapid City Area School District 51-4 (urban): math 34% / reading 46% proficiency, ranked #50 of 59 in SD (top 85%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.7%/yr); 217 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 1,181 units permitted in Pennington County in 2024 (715 in 5+ unit buildings).
• Pennington County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 10 sale attempts since 10y ago; this cycle's ask has dropped $18k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 6.3% vs local median 2.5% in Rapid City — 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

• It's been on market 222 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.