705 Mechanic St

Osage, IA 50461

$159,880D

3 bd · 2.5 ba · 2,172 sqft · Built 1869 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,180/mo
• Mortgage (P&I): −$838
• Tax + insurance: −$211
• HOA: −$0
• Vac / Maint / Mgmt: −$248
• Net cashflow: $-118/mo
• Annual: $-1,410/yr
• Cap rate: 5.41%
• Cash-on-cash: -3.15%
• DSCR: 0.86
• 1% rule: 0.74%
• Cash to close: $44,766

Investor read

• This is a 3-bed/2.5-bath single-family listed at $160k.
• At list price, monthly cash flow is $-118 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $139k (13.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $118k (26.2% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $118k (26.2% 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 $5k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#80 in IA, #1,667 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Osage Community School District (town): math 68% / reading 76% proficiency, ranked #108 of 289 in IA (top 37%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Osage Middle School (math 68% / reading 82%, grade A, #72 of 246 statewide, top 30%, 268 students, 33% FRL); Osage High School (math 63% / reading 77%, grade B+, #146 of 336 statewide, top 45%, 313 students, 26% FRL).
• Watch-outs: built in 1869 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 43 active listings in the ZIP; 41 units permitted in Mitchell County in 2024 (0 in 5+ unit buildings).
• Mitchell County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 4y ago 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.
• Current owner paid $132k; 21% above their basis — modest negotiation headroom, anchor on the comps not their cost.

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?
• Built in 1869 — 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?
• 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.
• 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.