422 N 3rd Ave E

Newton, IA 50208

$189,000D

4 bd · 3.0 ba · 2,280 sqft · Built 1900 · SingleFamily · Active · 233 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,545/mo
• Mortgage (P&I): −$991
• Tax + insurance: −$352
• HOA: −$0
• Vac / Maint / Mgmt: −$324
• Net cashflow: $-123/mo
• Annual: $-1,471/yr
• Cap rate: 5.51%
• Cash-on-cash: -2.78%
• DSCR: 0.88
• 1% rule: 0.82%
• Cash to close: $52,920

Investor read

• This is a 4-bed/3.0-bath single-family listed at $189k.
• At list price, monthly cash flow is $-123 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $167k (11.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $154k (18.3% below list).
• It's been on market 233 days — a 12% lower offer ($166k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (18.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#169 in IA, #3,069 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, employment D+, amenities F.
• Newton Community School District (town): math 59% / reading 62% proficiency, ranked #245 of 289 in IA (top 85%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 242 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 16 units permitted in Jasper County in 2024 (0 in 5+ unit buildings).
• Jasper County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 11y ago; this cycle's ask has dropped $16k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $113k; list at $189k implies a 67% gain — meaningful room to come down on a strong offer.
• Cap rate 5.5% vs local median 3.1% in Newton — 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 233 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 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.