712 Michigan St

Storm Lake, IA 50588

$100,000D+

3 bd · 1.0 ba · 1,214 sqft · Built 1915 · SingleFamily · Pending · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $875/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$221
• HOA: −$0
• Vac / Maint / Mgmt: −$184
• Net cashflow: $-54/mo
• Annual: $-652/yr
• Cap rate: 5.64%
• Cash-on-cash: -2.33%
• DSCR: 0.90
• 1% rule: 0.88%
• Cash to close: $28,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $100k.
• At list price, monthly cash flow is $-54 ($-652/yr) — negative.
• To cash-flow at today's rent, offer at most $90k (9.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $88k (12.5% below list).
• It's been on market 52 days — a 3% lower offer ($97k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $88k (12.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $691 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#190 in IA, #3,480 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment D-.
• Storm Lake Community School District (town): math 47% / reading 54% proficiency, ranked #280 of 289 in IA (top 97%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Storm Lake Elementary (math 48% / reading 45%, grade D-, #546 of 616 statewide, top 89%, 814 students, 76% FRL); Storm Lake Middle School (math 48% / reading 54%, grade C, #210 of 246 statewide, top 87%, 787 students, 69% FRL); Storm Lake High School (math 45% / reading 61%, grade C-, #296 of 336 statewide, top 88%, 793 students, 62% FRL).
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 85 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 164 units permitted in Buena Vista County in 2024 (71 in 5+ unit buildings).
• Buena Vista County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $25k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.6% vs local median 2.9% in Storm Lake — 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?
• It's been on market 52 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1915 — 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.
• 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.
• 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.