203 E Adams St

Rapid City, SD 57701

$99,000C

2 bd · 1.0 ba · 862 sqft · Built 1942 · SingleFamily · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,156/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$190
• HOA: −$0
• Vac / Maint / Mgmt: −$243
• Net cashflow: $204/mo
• Annual: $2,448/yr
• Cap rate: 8.77%
• Cash-on-cash: 8.83%
• DSCR: 1.39
• 1% rule: 1.17%
• Cash to close: $27,720

Investor read

• This is a 2-bed/1.0-bath single-family listed at $99k.
• At list price, monthly cash flow is $204 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• It's been on market 49 days — a 3% lower offer ($96k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $96k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $684 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#34 in SD, #4,720 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F.
• Rapid City Area School District 51-4 (urban): math 34% / reading 46% proficiency, ranked #50 of 59 in SD (top 85%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1942 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.7%/yr); 216 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 1,181 units permitted in Pennington County in 2024 (715 in 5+ unit buildings).
• Pennington County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 4y ago; this cycle's ask has dropped $10k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 8.8% vs local median 2.5% in Rapid 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 49 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1942 — 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.
• 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?
• 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.