2225 Bancroft Dr

Iowa City, IA 52240

$239,900F

4 bd · 2.0 ba · 936 sqft · Built 1977 · SingleFamily · Pending · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,613/mo
• Mortgage (P&I): −$1,258
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$339
• Net cashflow: $-384/mo
• Annual: $-4,606/yr
• Cap rate: 4.37%
• Cash-on-cash: -6.86%
• DSCR: 0.69
• 1% rule: 0.67%
• Cash to close: $67,172

Investor read

• This is a 4-bed/2.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $-384 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $184k (23.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $161k (32.8% below list).
• It's been on market 16 days — a 2% lower offer ($236k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $161k (32.8% 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 86/100 on livability (#13 in IA, #450 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+.
• Iowa City Community School District (urban): math 65% / reading 70% proficiency, ranked #174 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Kirkwood Elementary School (math 27% / reading 37%, grade F, #601 of 616 statewide, top 98%, 269 students, 69% FRL); Southeast Junior High School (math 64% / reading 68%, grade A-, #152 of 246 statewide, top 62%, 812 students, 50% FRL); Iowa City High School (math 62% / reading 73%, grade B, #186 of 336 statewide, top 57%, 1,599 students, 40% FRL) — zoned schools average 53% FRL vs 30% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 55% at this address vs 68% district-wide (-12 pts) — the specific schools serving this property underperform the Iowa City Community School District average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising fast (+6.3%/yr); 261 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 714 units permitted in Johnson County in 2024 (158 in 5+ unit buildings).
• Johnson County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.4% vs local median 2.7% in Iowa City — 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.
• This rent runs 37% of the median local income ($53k/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?
• Built in 1977 — 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.