909 W 1st St #2

Pella, IA 50219

$240,000D

3 bd · 2.5 ba · 1,519 sqft · Built 1971 · Condo · Pending · 123 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,575/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$255
• HOA: −$154
• Vac / Maint / Mgmt: −$331
• Net cashflow: $-423/mo
• Annual: $-5,076/yr
• Cap rate: 4.18%
• Cash-on-cash: -7.55%
• DSCR: 0.66
• 1% rule: 0.66%
• Cash to close: $67,200

Investor read

• This is a 3-bed/2.5-bath condo listed at $240k.
• At list price, monthly cash flow is $-423 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $165k (31.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $158k (34.4% below list).
• It's been on market 123 days — a 12% lower offer ($211k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $158k (34.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 90/100 on livability (#6 in IA, #101 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, cost of living A+; Watch: commute F.
• Pella Community School District (town): math 85% / reading 85% proficiency, ranked #8 of 289 in IA (top 3%) — strong family-tenant draw, lease renewals of 3-5y typical; only 13% free/reduced lunch — higher-income household profile.
• Zoned schools: Madison Elementary School (math 82% / reading 67%, grade A, #131 of 616 statewide, top 27%, 490 students, 23% FRL); Jefferson Intermediate (math 80% / reading 85%, grade A+, #16 of 246 statewide, top 8%, 526 students, 19% FRL); Pella High School (math 85% / reading 89%, grade A, #9 of 336 statewide, top 3%, 764 students, 14% FRL).
• Market conditions: Rents rising fast (+8.2%/yr); 244 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 122 units permitted in Marion County in 2024 (0 in 5+ unit buildings).
• Marion County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 4.2% vs local median 2.0% in Pella — 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 123 days. Have you received any prior offers? Is the seller open to a 34% concession, seller financing, or rate buy-down credit?
• Built in 1971 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?