316 N Catherine Ave Ave

Madison, SD 57042

$95,000B+

2 bd · 1.0 ba · 840 sqft · Built 1948 · Other · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,391/mo
• Mortgage (P&I): −$498
• Tax + insurance: −$155
• HOA: −$0
• Vac / Maint / Mgmt: −$292
• Net cashflow: $446/mo
• Annual: $5,348/yr
• Cap rate: 11.92%
• Cash-on-cash: 20.10%
• DSCR: 1.89
• 1% rule: 1.46%
• Cash to close: $26,600

Investor read

• This is a 2-bed/1.0-bath other listed at $95k.
• At list price, monthly cash flow is $446 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $95k).
• It's been on market 83 days — a 6% lower offer ($89k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $657 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#26 in SD, #3,922 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Madison Central School District 39-2 (town): math 41% / reading 55% proficiency, ranked #36 of 59 in SD (top 61%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Madison Elementary - 07 (math 48% / reading 55%, grade C-, #109 of 253 statewide, top 43%, 508 students, 24% FRL); Madison Middle School - 02 (math 36% / reading 51%, grade D, #89 of 143 statewide, top 63%, 257 students, 20% FRL); Madison High School - 01 (math 37% / reading 72%, grade C-, #53 of 151 statewide, top 41%, 382 students, 16% FRL) — zoned schools at 20% FRL track the district average.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 130 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 35 units permitted in Lake County in 2024 (0 in 5+ unit buildings).
• Lake County population projected at +32% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $5k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $40k; list at $95k implies a 138% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.9% vs local median 2.8% in Madison — 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 83 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1948 — 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 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?
• 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.