112 W 2nd St

Mount Vernon, SD 57363

$115,000D+

3 bd · 1.0 ba · 1,084 sqft · Built 1910 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,135/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$369
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $-75/mo
• Annual: $-904/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.12%
• DSCR: 1.18
• 1% rule: 0.99%
• Cash to close: $32,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $115k.
• At list price, monthly cash flow is $-75 ($-904/yr) — negative.
• To cash-flow at today's rent, offer at most $102k (11.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $113k (1.3% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $102k (11.6% below list) — sets the bar for cash-flow.
• Local home prices are declining (-2.3%/yr); year-one equity from $795 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#153 in SD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, crime D+, amenities F.
• Mount Vernon School District 17-3 (rural): math 50% / reading 50% proficiency, ranked #64 of 148 in SD (top 43%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $186/mo; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 48 units permitted in Davison County in 2024 (0 in 5+ unit buildings).
• Davison County population projected at +7% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $25k; list at $115k implies a 360% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.