420 2nd Ave E

Gildford, MT 59525

$159,000D

2 bd · 1.0 ba · 1,823 sqft · Built 1920 · SingleFamily · Pending · 59 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,254/mo
• Mortgage (P&I): −$834
• Tax + insurance: −$244
• HOA: −$0
• Vac / Maint / Mgmt: −$263
• Net cashflow: $-87/mo
• Annual: $-1,048/yr
• Cap rate: 5.63%
• Cash-on-cash: -2.35%
• DSCR: 0.90
• 1% rule: 0.79%
• Cash to close: $44,520

Investor read

• This is a 2-bed/1.0-bath single-family listed at $159k.
• At list price, monthly cash flow is $-87 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $125k (21.2% below list).
• It's been on market 59 days — a 3% lower offer ($154k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $125k (21.2% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($1k loan paydown + $6k appreciation (3.9% local appreciation)).
• Location reads 67/100 on livability (#109 in MT) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B+; Watch: health & safety C-, crime F, amenities F.
• North Star Elementary (rural): math 40% / reading 45% proficiency, ranked #126 of 339 in MT (top 37%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: North Star School (math 24% / reading 44%, grade F, #197 of 293 statewide, top 71%, 114 students, 0% FRL); North Star 7-8 (math 50% / reading 70%, grade B, #8 of 146 statewide, top 6%, 36 students, 0% FRL); North Star High School (math 24% / reading 24%, grade F, #80 of 132 statewide, top 80%, 53 students, 0% FRL) — zoned schools average 0% FRL vs 34% district-wide (34 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 3 active listings in the ZIP; 1 units permitted in Hill County in 2024 (0 in 5+ unit buildings).
• 4 sale attempts since 2y 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.
• By year 5, paydown + projected appreciation supports a ~$31k 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?
• It's been on market 59 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• 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.