212 Cottage Ln

Montezuma, IA 50171

$265,000D-

3 bd · 2.0 ba · 1,080 sqft · Built 2004 · SingleFamily · Active · 433 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,071/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$252
• HOA: −$0
• Vac / Maint / Mgmt: −$225
• Net cashflow: $-796/mo
• Annual: $-9,548/yr
• Cap rate: 2.69%
• Cash-on-cash: -12.87%
• DSCR: 0.43
• 1% rule: 0.40%
• Cash to close: $74,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $265k.
• At list price, monthly cash flow is $-796 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $124k (53.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $107k (59.6% below list).
• It's been on market 433 days — a 12% lower offer ($233k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $107k (59.6% below list) — sets the bar for 1% rule.
• In year one you build about $28k of equity ($2k loan paydown + $26k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#228 in IA, #4,319 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Montezuma Community School District (rural): math 73% / reading 79% proficiency, ranked #55 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Montezuma Elementary School (math 92% / reading 77%, grade A+, #31 of 616 statewide, top 6%, 229 students, 34% FRL); Montezuma Junior High School (math 62% / reading 72%, grade A-, #140 of 246 statewide, top 60%, 112 students, 39% FRL); Montezuma High School (math 67% / reading 87%, grade A-, #60 of 336 statewide, top 21%, 148 students, 28% FRL).
• Market conditions: 67 active listings in the ZIP; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 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.
• By year 2, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 2.7% vs local median 1.5% in Montezuma — 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 433 days. Have you received any prior offers? Is the seller open to a 60% concession, seller financing, or rate buy-down credit?
• 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.
• Schools are A-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?
• 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.