12774 US Highway 18

Hot Springs, SD 57747

$59,000B-

1 bd · 1.0 ba · 600 sqft · Built 1967 · Manufactured · Active · 89 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $774/mo
• Mortgage (P&I): −$309
• Tax + insurance: −$98
• HOA: −$0
• Vac / Maint / Mgmt: −$162
• Net cashflow: $203/mo
• Annual: $2,442/yr
• Cap rate: 10.43%
• Cash-on-cash: 14.78%
• DSCR: 1.66
• 1% rule: 1.31%
• Cash to close: $16,520

Investor read

• This is a 1-bed/1.0-bath manufactured listed at $59k. Condition is rated good.
• At list price, monthly cash flow is $203 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($774 rent vs $59k).
• It's been on market 89 days — a 6% lower offer ($55k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $55k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $408 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#9 in SD, #2,212 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Hot Springs School District 23-2 (town): math 36% / reading 51% proficiency, ranked #47 of 59 in SD (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 239 active listings in the ZIP; 9 units permitted in Fall River County in 2024 (0 in 5+ unit buildings).
• 6 sale attempts since 2y ago; this cycle's ask has dropped $16k (21%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $17k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.4% vs local median 1.5% in Hot 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

• It's been on market 89 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.