605 8th St #607

Ames, IA 50010

$145,000B+

3 bd · 2.0 ba · 1,965 sqft · Built 1920 · MultiFamily · Active · 60 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,989/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$278
• HOA: −$0
• Vac / Maint / Mgmt: −$418
• Net cashflow: $533/mo
• Annual: $6,400/yr
• Cap rate: 10.71%
• Cash-on-cash: 15.76%
• DSCR: 1.70
• 1% rule: 1.37%
• Cash to close: $40,600

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $145k.
• At list price, monthly cash flow is $533 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $145k).
• It's been on market 60 days — a 3% lower offer ($141k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $141k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 93/100 on livability (#2 in IA, #21 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: employment C-.
• Ames Community School District (urban): math 70% / reading 72% proficiency, ranked #147 of 289 in IA (top 51%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Meeker Elementary School (math 57% / reading 67%, grade B, #363 of 616 statewide, top 62%, 351 students, 38% FRL); Ames Middle School (math 71% / reading 70%, grade A, #111 of 246 statewide, top 45%, 1,002 students, 31% FRL); Ames High School (math 69% / reading 77%, grade B+, #114 of 336 statewide, top 34%, 1,403 students, 30% FRL).
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.7%/yr); 184 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 196 units permitted in Story County in 2024 (34 in 5+ unit buildings).
• Story County population projected at +54% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 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.
• At projected returns (-3.0% appreciation + 2.7% rent growth), your $41k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 10.7% vs local median 2.2% in Ames — 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 runs 36% of the median local income ($65k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 60 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.