408 Court St

Harlan, IA 51537

$105,000B+

5 bd · 2.5 ba · 1,709 sqft · Built 1890 · SingleFamily · Active · 289 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,474/mo
• Mortgage (P&I): −$551
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$309
• Net cashflow: $463/mo
• Annual: $5,559/yr
• Cap rate: 11.59%
• Cash-on-cash: 18.91%
• DSCR: 1.84
• 1% rule: 1.40%
• Cash to close: $29,400

Investor read

• This is a 5-bed/2.5-bath single-family listed at $105k.
• At list price, monthly cash flow is $463 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $105k).
• It's been on market 289 days — a 12% lower offer ($92k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $92k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $726 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#79 in IA, #1,656 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, amenities F, commute F.
• Harlan Community School District (town): math 72% / reading 77% proficiency, ranked #81 of 289 in IA (top 28%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Harlan Primary (369 students, 44% FRL); Harlan Community Middle School (math 70% / reading 81%, grade A, #65 of 246 statewide, top 29%, 342 students, 36% FRL); Harlan High School (math 77% / reading 82%, grade A-, #34 of 336 statewide, top 14%, 477 students, 31% FRL).
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 35 active listings in the ZIP; 8 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts; this cycle's ask is 5% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $64k; list at $105k implies a 63% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $29k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.6% vs local median 4.0% in Harlan — 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

• It's been on market 289 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1890 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.