3600 S Gateway Blvd Blvd #103

Sioux Falls, SD 57106

$98,000D-

2 bd · 2.0 ba · 768 sqft · Built 1977 · Condo · Active · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,092/mo
• Mortgage (P&I): −$514
• Tax + insurance: −$149
• HOA: −$370
• Vac / Maint / Mgmt: −$229
• Net cashflow: $-170/mo
• Annual: $-2,043/yr
• Cap rate: 4.21%
• Cash-on-cash: -7.44%
• DSCR: 0.67
• 1% rule: 1.11%
• Cash to close: $27,440

Investor read

• This is a 2-bed/2.0-bath condo listed at $98k.
• At list price, monthly cash flow is $-170 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $68k (30.7% below list).
• Meets the 1% rule at list price ($1k rent vs $98k).
• It's been on market 79 days — a 6% lower offer ($92k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $68k (30.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $678 of loan paydown is wiped out by about $3k 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.
• Sioux Falls School District 49-5 (urban): math 39% / reading 48% proficiency, ranked #45 of 59 in SD (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 34% of rent.
• Market conditions: Rents rising (+2.2%/yr); 393 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 42% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 2,425 units permitted in Minnehaha County in 2024 (1,367 in 5+ unit buildings).
• Minnehaha County population projected at +46% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 8y ago; this cycle's ask has dropped $10k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $57k; list at $98k implies a 72% gain — meaningful room to come down on a strong offer.
• 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.
• This rent is only 17% of the median local income ($78k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 79 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?