132 S Reed St

Centralia, MO 65240

$165,000D

4 bd · 2.0 ba · 1,400 sqft · Built 1965 · SingleFamily · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,227/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$179
• HOA: −$0
• Vac / Maint / Mgmt: −$258
• Net cashflow: $-75/mo
• Annual: $-897/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.94%
• DSCR: 0.91
• 1% rule: 0.74%
• Cash to close: $46,200

Investor read

• This is a 4-bed/2.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-75 ($-897/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (8.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (25.6% below list).
• It's been on market 25 days — a 2% lower offer ($163k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (25.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#127 in MO) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Centralia R-VI (town): math 43% / reading 48% proficiency, ranked #82 of 324 in MO (top 25%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Chance Elem. (319 students, 25% FRL); Chester Boren Middle (math 43% / reading 41%, grade D-, #149 of 391 statewide, top 41%, 300 students, 31% FRL); Centralia High (math 52% / reading 62%, grade C, #51 of 521 statewide, top 11%, 406 students, 26% FRL) — zoned schools at 27% FRL track the district average.
• Market conditions: 71 active listings in the ZIP; 1,303 units permitted in Boone County in 2024 (549 in 5+ unit buildings).
• Boone County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 6y ago; this cycle's ask has dropped $10k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.7% vs local median 2.8% in Centralia — 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?
• Built in 1965 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.