7809 Lewis Ave Ave

Billings, MT 59106

$225,000D-

2 bd · 1.0 ba · 1,120 sqft · Built 1948 · SingleFamily · Active · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,681/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$167
• HOA: −$0
• Vac / Maint / Mgmt: −$353
• Net cashflow: $-19/mo
• Annual: $-232/yr
• Cap rate: 6.19%
• Cash-on-cash: -0.37%
• DSCR: 0.98
• 1% rule: 0.75%
• Cash to close: $63,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-19 ($-232/yr) — negative.
• To cash-flow at today's rent, offer at most $222k (1.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $168k (25.3% below list).
• It's been on market 102 days — a 9% lower offer ($205k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $168k (25.3% 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 $7k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#10 in MT, #1,830 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, housing A+; Watch: crime F.
• Elder Grove Elementary (rural): math 34% / reading 45% proficiency, ranked #54 of 116 in MT (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 15% free/reduced lunch — higher-income household profile.
• Zoned schools: Elder Grove School (math 47% / reading 47%, grade D-, #101 of 293 statewide, top 39%, 458 students, 0% FRL); Elder Grove 7-8 (math 23% / reading 43%, grade F, #97 of 146 statewide, top 66%, 231 students, 0% FRL) — zoned schools average 0% FRL vs 15% district-wide (15 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.4%/yr); 414 active listings in the ZIP; high-income renter base; 1,401 units permitted in Yellowstone County in 2024 (281 in 5+ unit buildings).
• Yellowstone County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 3.0% in Billings — 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 16% of the median local income ($126k/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 102 days. Have you received any prior offers? Is the seller open to a 25% 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 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?
• 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?