3606 W Hughes Pl Pl

Sioux Falls, SD 57108

$315,000D-

5 bd · 3.0 ba · 2,335 sqft · Built 2004 · Townhouse · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,314/mo
• Mortgage (P&I): −$1,652
• Tax + insurance: −$435
• HOA: −$12
• Vac / Maint / Mgmt: −$486
• Net cashflow: $-271/mo
• Annual: $-3,247/yr
• Cap rate: 5.26%
• Cash-on-cash: -3.68%
• DSCR: 0.84
• 1% rule: 0.73%
• Cash to close: $88,200

Investor read

• This is a 5-bed/3.0-bath townhouse listed at $315k.
• At list price, monthly cash flow is $-271 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $267k (15.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $231k (26.5% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $231k (26.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#3 in SD, #610 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime F.
• Harrisburg School District 41-2 (rural): math 53% / reading 63% proficiency, ranked #6 of 59 in SD (top 10%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Zoned schools: Harrisburg North Middle School - 08 (math 55% / reading 69%, grade B+, #13 of 143 statewide, top 11%, 747 students, 11% FRL); Harrisburg High School - 01 (math 33% / reading 60%, grade D-, #109 of 151 statewide, top 72%, 1,613 students, 9% FRL) — zoned schools at 10% FRL track the district average.
• Market conditions: Rents rising fast (+6.4%/yr); 330 active listings in the ZIP; solid renter incomes; 232 units permitted in Lincoln County in 2024 (14 in 5+ unit buildings).
• Lincoln County population projected at +66% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts 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.
• Cap rate 5.3% vs local median 2.6% in Sioux Falls — 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

• 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.