409 S Water St

Warren, IL 61087

$109,000C-

3 bd · 1.0 ba · 1,127 sqft · Built 1920 · Other · Pending · 60 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,049/mo
• Mortgage (P&I): −$572
• Tax + insurance: −$157
• HOA: −$0
• Vac / Maint / Mgmt: −$220
• Net cashflow: $101/mo
• Annual: $1,210/yr
• Cap rate: 7.40%
• Cash-on-cash: 3.97%
• DSCR: 1.18
• 1% rule: 0.96%
• Cash to close: $30,520

Investor read

• This is a 3-bed/1.0-bath other listed at $109k.
• At list price, monthly cash flow is $101 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $105k (3.7% below list).
• It's been on market 60 days — a 3% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $105k (3.7% below list) — sets the bar for 1% rule.
• In year one you build about $12k of equity ($754 loan paydown + $11k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#290 in IL) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools C-, employment C-, amenities F.
• Warren CUSD 205 (rural): math 40% / reading 45% proficiency, ranked #273 of 919 in IL (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 58 units permitted in Jo Daviess County in 2024 (0 in 5+ unit buildings).
• Jo Daviess County population projected at -25% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $11k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $49k; list at $109k implies a 122% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 60 days. Have you received any prior offers? Is the seller open to a 4% 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.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.