132 Main Ave

Gary, SD 57237

$159,900D

3 bd · 1.0 ba · 2,500 sqft · Built 1897 · SingleFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,302/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$265
• HOA: −$0
• Vac / Maint / Mgmt: −$273
• Net cashflow: $-75/mo
• Annual: $-895/yr
• Cap rate: 5.73%
• Cash-on-cash: -2.00%
• DSCR: 0.91
• 1% rule: 0.81%
• Cash to close: $44,772

Investor read

• This is a 3-bed/1.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $-75 ($-895/yr) — negative.
• To cash-flow at today's rent, offer at most $147k (8.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $130k (18.6% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $130k (18.6% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($1k loan paydown + $12k appreciation (7.3% local appreciation)).
• Location reads 60/100 on livability (#253 in SD) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, health & safety C-, crime F.
• Deuel School District 19-4 (rural): math 39% / reading 47% proficiency, ranked #46 of 59 in SD (top 78%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Clear Lake Elementary - 02 (math 47% / reading 52%, grade D, #115 of 253 statewide, top 52%, 259 students, 17% FRL); Clear Lake Middle School - 04 (math 32% / reading 42%, grade F, #110 of 143 statewide, top 80%, 125 students, 14% FRL); Deuel High School - 01 (math 30% / reading 50%, grade F, #114 of 151 statewide, top 81%, 160 students, 16% FRL).
• Watch-outs: built in 1897 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 9 active listings in the ZIP; 18 units permitted in Deuel County in 2024 (0 in 5+ unit buildings).
• 2 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 $130k; 23% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (7.3% appreciation + 3.0% rent growth), your $45k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — 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 1897 — 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?
• 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?
• 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.