3509 W Hughes Pl Pl

Sioux Falls, SD 57108

$294,900D-

4 bd · 2.0 ba · 2,225 sqft · Built 2004 · Other · Active · 162 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,935/mo
• Mortgage (P&I): −$1,546
• Tax + insurance: −$488
• HOA: −$12
• Vac / Maint / Mgmt: −$406
• Net cashflow: $-517/mo
• Annual: $-6,208/yr
• Cap rate: 4.19%
• Cash-on-cash: -7.52%
• DSCR: 0.67
• 1% rule: 0.66%
• Cash to close: $82,572

Investor read

• This is a 4-bed/2.0-bath other listed at $295k.
• At list price, monthly cash flow is $-517 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (31.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $194k (34.4% below list).
• It's been on market 162 days — a 12% lower offer ($260k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $194k (34.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#3 in SD, #610 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F.
• Harrisburg School District 41-2 (rural): math 53% / reading 63% proficiency, ranked #6 of 59 in SD (top 10%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+6.4%/yr); 327 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 232 units permitted in Lincoln County in 2024 (14 in 5+ unit buildings).
• Lincoln County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 22y 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.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.2% vs local median 2.6% in Sioux Falls — 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 162 days. Have you received any prior offers? Is the seller open to a 34% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 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?
• 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?