408 S Olive St

Mexico, MO 65265

$47,900B-

2 bd · 1.0 ba · 728 sqft · Built 1940 · Other · Active · 206 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,072/mo
• Mortgage (P&I): −$251
• Tax + insurance: −$91
• HOA: −$0
• Vac / Maint / Mgmt: −$225
• Net cashflow: $505/mo
• Annual: $6,057/yr
• Cap rate: 18.94%
• Cash-on-cash: 45.16%
• DSCR: 3.01
• 1% rule: 2.24%
• Cash to close: $13,412

Investor read

• This is a 2-bed/1.0-bath other listed at $48k.
• At list price, monthly cash flow is $505 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $48k).
• It's been on market 206 days — a 12% lower offer ($42k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $42k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $331 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#256 in MO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A, health & safety A-; Watch: crime F, amenities F, commute F.
• Mexico 59 (town): math 31% / reading 38% proficiency, ranked #229 of 324 in MO (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Eugene Field Elem. (math 31% / reading 41%, grade F, #662 of 1,115 statewide, top 60%, 424 students, 100% FRL); Mexico Middle (math 33% / reading 34%, grade F, #260 of 391 statewide, top 67%, 503 students, 100% FRL); Mexico High (math 22% / reading 47%, grade F, #321 of 521 statewide, top 67%, 746 students, 53% FRL) — zoned schools average 84% FRL vs 52% district-wide (32 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 136 active listings in the ZIP; 27 units permitted in Audrain County in 2024 (0 in 5+ unit buildings).
• Audrain County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 6y ago; this cycle's ask has dropped $12k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $13k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 18.9% vs local median 4.5% in Mexico — 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 206 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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.
• 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?
• 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?
• 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.