224 1st St St SW

Highmore, SD 57345

$77,500B

3 bd · 1.0 ba · 1,179 sqft · Built 1919 · Other · Active · 114 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,071/mo
• Mortgage (P&I): −$406
• Tax + insurance: −$126
• HOA: −$0
• Vac / Maint / Mgmt: −$225
• Net cashflow: $314/mo
• Annual: $3,766/yr
• Cap rate: 11.15%
• Cash-on-cash: 17.36%
• DSCR: 1.77
• 1% rule: 1.38%
• Cash to close: $21,700

Investor read

• This is a 3-bed/1.0-bath other listed at $78k.
• At list price, monthly cash flow is $314 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $78k).
• It's been on market 114 days — a 9% lower offer ($71k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $71k (9.0% below list) — sets the bar for market timing.
• In year one you build about $3k of equity ($536 loan paydown + $2k appreciation (3.0% local appreciation)).
• Location reads 69/100 on livability (#75 in SD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B; Watch: health & safety C-, crime D, amenities F.
• Highmore-Harrold 34-2 (rural): math 50% / reading 50% proficiency, ranked #69 of 148 in SD (top 47%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1919 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 4 active listings in the ZIP.
• Hyde County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask is 3% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~4 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 114 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1919 — 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?
• Crime grade is D 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.