4038 Phelps Dr

Holiday Lake, IA 52211

$109,500C+

2 bd · 2.0 ba · 1,900 sqft · Built 2000 · SingleFamily · Active · 218 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,053/mo
• Mortgage (P&I): −$574
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$221
• Net cashflow: $108/mo
• Annual: $1,293/yr
• Cap rate: 7.47%
• Cash-on-cash: 4.22%
• DSCR: 1.19
• 1% rule: 0.96%
• Cash to close: $30,660

Investor read

• This is a 2-bed/2.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $108 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $105k (3.8% below list).
• It's been on market 218 days — a 12% lower offer ($96k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $96k (12.0% below list) — sets the bar for market timing.
• In year one you build about $10k of equity ($757 loan paydown + $9k appreciation (8.6% local appreciation)).
• Location reads 66/100 on livability (#524 in IA) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools D, amenities F, commute F.
• Brooklyn-Guernsey-Malcom Community School District (rural): math 72% / reading 74% proficiency, ranked #101 of 289 in IA (top 35%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: 57 active listings in the ZIP; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $50k (31%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (8.6% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 7.5% vs local median 1.8% in Holiday Lake — 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 218 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?
• 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.