2224 US Highway 87e #52

Lockwood, MT 59102

$49,000B+

3 bd · 2.0 ba · 1,216 sqft · Built 1981 · Manufactured · Active · 84 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,769/mo
• Mortgage (P&I): −$257
• Tax + insurance: −$82
• HOA: −$695
• Vac / Maint / Mgmt: −$372
• Net cashflow: $364/mo
• Annual: $4,371/yr
• Cap rate: 15.21%
• Cash-on-cash: 31.86%
• DSCR: 2.42
• 1% rule: 3.61%
• Cash to close: $13,720

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $49k. Condition is rated good.
• At list price, monthly cash flow is $364 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $49k).
• It's been on market 84 days — a 6% lower offer ($46k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $46k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $339 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#238 in MT) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: health & safety C-, schools F, amenities F.
• Lockwood K-12 (suburban): math 21% / reading 33% proficiency, ranked #86 of 116 in MT (top 74%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: HOA is 39% of rent.
• Market conditions: Rents rising fast (+5.0%/yr); 197 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 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.
• At projected returns (-3.0% appreciation + 5.0% rent growth), your $14k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 15.2% vs local median 1.7% in Lockwood — 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 84 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.