506 4th Ave SW

Valley City, ND 58072

$165,000D-

5 bd · 2.0 ba · 1,757 sqft · Built 1901 · SingleFamily · Pending · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,478/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$310
• Net cashflow: $44/mo
• Annual: $525/yr
• Cap rate: 6.61%
• Cash-on-cash: 1.14%
• DSCR: 1.05
• 1% rule: 0.90%
• Cash to close: $46,200

Investor read

• This is a 5-bed/2.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $44 ($525/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $148k (10.4% below list).
• It's been on market 105 days — a 9% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $148k (10.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#30 in ND, #4,920 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: health & safety D+, amenities F, commute F.
• Valley City 2 (town): math 52% / reading 40% proficiency, ranked #21 of 53 in ND (top 40%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Jefferson Elementary School (math 62% / reading 47%, grade C, #39 of 236 statewide, top 21%, 304 students, 42% FRL); Washington Elementary School (math 46% / reading 32%, grade F, #20 of 35 statewide, top 56%, 215 students, 42% FRL); Valley City High School (math 47% / reading 52%, grade D, #19 of 144 statewide, top 19%, 366 students, 34% FRL).
• Watch-outs: built in 1901 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 77 active listings in the ZIP; 9 units permitted in Barnes County in 2024 (0 in 5+ unit buildings).
• Barnes County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 5y 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.
• Current owner paid $135k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.6% vs local median 3.5% in Valley City — 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 105 days. Have you received any prior offers? Is the seller open to a 10% concession, seller financing, or rate buy-down credit?
• Built in 1901 — 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?
• 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?
• 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.