405 S Hill St

Willow Springs, MO 65793

$39,900B-

2 bd · 1.0 ba · 994 sqft · Built 1920 · Other · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $884/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$30
• HOA: −$0
• Vac / Maint / Mgmt: −$186
• Net cashflow: $459/mo
• Annual: $5,514/yr
• Cap rate: 20.11%
• Cash-on-cash: 49.36%
• DSCR: 3.20
• 1% rule: 2.22%
• Cash to close: $11,172

Investor read

• This is a 2-bed/1.0-bath other listed at $40k.
• At list price, monthly cash flow is $459 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($884 rent vs $40k).
• It's been on market 20 days — a 2% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#386 in MO) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+; Watch: schools F, amenities F, commute F.
• Willow Springs R-IV (rural): math 34% / reading 50% proficiency, ranked #140 of 324 in MO (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 80 active listings in the ZIP; 53 units permitted in Howell County in 2024 (0 in 5+ unit buildings).
• Howell County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 20.1% vs local median 3.7% in Willow Springs — 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

• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.