823 Hearrell Ave

Neosho, MO 64850

$138,900F

4 bd · 3.5 ba · 1,608 sqft · Built 1940 · Other · Pending · 143 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $811/mo
• Mortgage (P&I): −$728
• Tax + insurance: −$232
• HOA: −$0
• Vac / Maint / Mgmt: −$170
• Net cashflow: $-320/mo
• Annual: $-3,843/yr
• Cap rate: 4.10%
• Cash-on-cash: -7.83%
• DSCR: 0.65
• 1% rule: 0.58%
• Cash to close: $38,892

Investor read

• This is a 4-bed/3.5-bath other listed at $139k.
• At list price, monthly cash flow is $-320 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $82k (40.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $81k (41.6% below list).
• It's been on market 143 days — a 12% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $81k (41.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $960 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#103 in MO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Neosho School District (town): math 36% / reading 48% proficiency, ranked #125 of 324 in MO (top 39%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Benton Elem. (math 34% / reading 40%, grade F, #611 of 1,115 statewide, top 59%, 505 students, 69% FRL); Neosho Jr. High (math 41% / reading 48%, grade D, #113 of 391 statewide, top 31%, 748 students, 58% FRL); Neosho High (math 21% / reading 57%, grade F, #287 of 521 statewide, top 55%, 1,491 students, 48% FRL).
• Watch-outs: flood insurance adds $66/mo; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 202 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 110 units permitted in Newton County in 2024 (40 in 5+ unit buildings).
• Newton County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 11y ago; this cycle's ask has dropped $70k (34%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major flood risk; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.1% vs local median 2.9% in Neosho — 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 143 days. Have you received any prior offers? Is the seller open to a 42% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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?