3905 Ontario St

Ames, IA 50014

$205,000C-

4 bd · 3.0 ba · 1,744 sqft · Built 1961 · SingleFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,733/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$344
• HOA: −$0
• Vac / Maint / Mgmt: −$364
• Net cashflow: $-51/mo
• Annual: $-607/yr
• Cap rate: 6.00%
• Cash-on-cash: -1.06%
• DSCR: 0.95
• 1% rule: 0.85%
• Cash to close: $57,400

Investor read

• This is a 4-bed/3.0-bath single-family listed at $205k.
• At list price, monthly cash flow is $-51 ($-607/yr) — negative.
• To cash-flow at today's rent, offer at most $196k (4.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $173k (15.5% below list).
• It's been on market 16 days — a 2% lower offer ($202k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $173k (15.5% 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 $6k of value loss. Plan a longer hold.
• Location reads 93/100 on livability (#2 in IA, #21 nationally) — a professional / high-income tenant draw. Strengths: schools A+, amenities A+, commute A+; Watch: employment C-.
• Ames Community School District (urban): math 70% / reading 72% proficiency, ranked #147 of 289 in IA (top 51%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: Rents rising (+3.7%/yr); 196 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 196 units permitted in Story County in 2024 (34 in 5+ unit buildings).
• Story County population projected at +54% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $15k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $142k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.0% vs local median 2.2% in Ames — 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 34% 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?
• Built in 1961 — 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?
• 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.