420-422 S Hackett Rd

Waterloo, IA 50701

$249,900D

4 bd · 3.0 ba · 1,892 sqft · Built 1964 · MultiFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,891/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$544
• HOA: −$0
• Vac / Maint / Mgmt: −$397
• Net cashflow: $-361/mo
• Annual: $-4,329/yr
• Cap rate: 4.56%
• Cash-on-cash: -6.19%
• DSCR: 0.72
• 1% rule: 0.76%
• Cash to close: $69,972

Investor read

• This is a 2 × 2-bed/?-bath units multifamily listed at $250k.
• At list price, monthly cash flow is $-361 ($-4k/yr) — negative. Per door: $-180/mo.
• To cash-flow at today's rent, offer at most $186k (25.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $189k (24.3% below list).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $186k (25.5% below list) — sets the bar for cash-flow.
• 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 81/100 on livability (#74 in IA, #1,589 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: schools C-, crime F, employment D-.
• Waterloo Community School District (urban): math 50% / reading 54% proficiency, ranked #276 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+3.8%/yr); 285 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 287 units permitted in Black Hawk County in 2024 (67 in 5+ unit buildings).
• Black Hawk County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $175k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• This rent runs 37% of the median local income ($61k/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?
• 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 1964 — 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.