507-509 Chestnut St

Dubuque, IA 52001

$395,000F

2 bd · 2.5 ba · 1,885 sqft · Built 1860 · MultiFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,049/mo
• Mortgage (P&I): −$2,071
• Tax + insurance: −$289
• HOA: −$0
• Vac / Maint / Mgmt: −$430
• Net cashflow: $-742/mo
• Annual: $-8,904/yr
• Cap rate: 4.04%
• Cash-on-cash: -8.05%
• DSCR: 0.64
• 1% rule: 0.52%
• Cash to close: $110,600

Investor read

• This is a 2 × 1-bed/?-bath units multifamily listed at $395k.
• At list price, monthly cash flow is $-742 ($-9k/yr) — negative. Per door: $-371/mo.
• To cash-flow at today's rent, offer at most $264k (33.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $205k (48.1% below list).
• It's been on market 33 days — a 3% lower offer ($383k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $205k (48.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#7 in IA, #119 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime C-.
• Dubuque Community School District (urban): math 63% / reading 65% proficiency, ranked #205 of 289 in IA (top 71%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lincoln Elementary School (math 42% / reading 42%, grade F, #563 of 616 statewide, top 93%, 255 students, 68% FRL); Dubuque Senior High School (math 63% / reading 74%, grade B, #181 of 336 statewide, top 54%, 1,435 students, 36% FRL) — zoned schools average 52% FRL vs 32% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1860 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.6%/yr); 234 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 473 units permitted in Dubuque County in 2024 (319 in 5+ unit buildings).
• Dubuque County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• This rent runs 40% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 33 days. Have you received any prior offers? Is the seller open to a 48% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1860 — 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 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?
• 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?