1405 Hill Ave

Sioux City, IA 51104

$138,999D

2 bd · 1.0 ba · 986 sqft · Built 1935 · SingleFamily · Active · 168 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,122/mo
• Mortgage (P&I): −$729
• Tax + insurance: −$226
• HOA: −$0
• Vac / Maint / Mgmt: −$236
• Net cashflow: $-69/mo
• Annual: $-823/yr
• Cap rate: 5.70%
• Cash-on-cash: -2.11%
• DSCR: 0.91
• 1% rule: 0.81%
• Cash to close: $38,920

Investor read

• This is a 2-bed/1.0-bath single-family listed at $139k.
• At list price, monthly cash flow is $-69 ($-823/yr) — negative.
• To cash-flow at today's rent, offer at most $127k (8.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $112k (19.3% below list).
• It's been on market 168 days — a 12% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (19.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $961 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#138 in IA, #2,544 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F.
• Sioux City Community School District (urban): math 54% / reading 57% proficiency, ranked #264 of 289 in IA (top 91%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 120 active listings in the ZIP; 10 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; solid renter incomes; 170 units permitted in Woodbury County in 2024 (90 in 5+ unit buildings).
• 4 sale attempts since 6y ago; this cycle's ask has dropped $21k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $72k; list at $139k implies a 92% gain — meaningful room to come down on a strong offer.
• Cap rate 5.7% vs local median 3.7% in Sioux 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 is only 18% of the median local income ($75k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• It's been on market 168 days. Have you received any prior offers? Is the seller open to a 19% concession, seller financing, or rate buy-down credit?
• Built in 1935 — 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.