419 S Pearl St

Salem, IL 62881

$12,500D

3 bd · 2.0 ba · 1,375 sqft · Built — · SingleFamily · Active · 166 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,231/mo
• Mortgage (P&I): −$66
• Tax + insurance: −$22
• HOA: −$0
• Vac / Maint / Mgmt: −$259
• Net cashflow: $885/mo
• Annual: $10,623/yr
• Cap rate: 91.27%
• Cash-on-cash: 303.50%
• DSCR: 14.50
• 1% rule: 9.85%
• Cash to close: $3,500

Investor read

• This is a 3-bed/2.0-bath single-family listed at $12k.
• At list price, monthly cash flow is $885 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $12k).
• It's been on market 166 days — a 12% lower offer ($11k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $11k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $86 of loan paydown is wiped out by about $375 of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#467 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment D-.
• Salem Chsd 600 (town): math 25% / reading 30% proficiency, ranked #571 of 919 in IL (top 62%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Hawthorn Elem School (math 22% / reading 32%, grade F, #749 of 2,056 statewide, top 40%, 399 students, 0% FRL); Franklin Park Middle School (math 25% / reading 44%, grade F, #201 of 665 statewide, top 31%, 529 students, 0% FRL); Salem Community High School (math 22% / reading 17%, grade F, #397 of 693 statewide, top 61%, 732 students, 0% FRL).
• Market conditions: 49 active listings in the ZIP; 2 units permitted in Marion County in 2024 (0 in 5+ unit buildings).
• Marion County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 7 sale attempts since 4y ago; this cycle's ask has dropped $8k (38%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $8k; list at $12k implies a 56% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $4k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 91.3% vs local median 5.5% in Salem — 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 166 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.