3806 12th St

Des Moines, IA 50313

$129,000D

2 bd · 1.0 ba · 934 sqft · Built 1890 · SingleFamily · Active · 249 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,017/mo
• Mortgage (P&I): −$676
• Tax + insurance: −$276
• HOA: −$0
• Vac / Maint / Mgmt: −$213
• Net cashflow: $-149/mo
• Annual: $-1,787/yr
• Cap rate: 4.91%
• Cash-on-cash: -4.95%
• DSCR: 0.78
• 1% rule: 0.79%
• Cash to close: $36,120

Investor read

• This is a 2-bed/1.0-bath single-family listed at $129k.
• At list price, monthly cash flow is $-149 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $103k (20.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $102k (21.2% below list).
• It's been on market 249 days — a 12% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $102k (21.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $892 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#63 in IA, #1,432 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, schools D+, crime F.
• Des Moines Independent Community School District (urban): math 43% / reading 46% proficiency, ranked #289 of 289 in IA (top 100%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+13.1%/yr); 154 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,953 units permitted in Polk County in 2024 (540 in 5+ unit buildings).
• Polk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 10 sale attempts since 15y ago; this cycle's ask has dropped $44k (26%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $80k; list at $129k implies a 62% gain — meaningful room to come down on a strong offer.
• Cap rate 4.9% vs local median 3.1% in Des Moines — 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.
• This rent is only 18% of the median local income ($68k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 249 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Built in 1890 — 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.
• Schools are D-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?