25-27 6th St NW

Mason City, IA 50401

$170,000B

3 bd · 1.5 ba · 1,512 sqft · Built 1914 · MultiFamily · Active · 59 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,790/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$185
• HOA: −$0
• Vac / Maint / Mgmt: −$586
• Net cashflow: $1,128/mo
• Annual: $13,535/yr
• Cap rate: 14.25%
• Cash-on-cash: 28.44%
• DSCR: 2.27
• 1% rule: 1.64%
• Cash to close: $47,600

Investor read

• This is a 2 × 3.0-bed/1.5-bath units multifamily listed at $170k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $564/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $170k).
• It's been on market 59 days — a 3% lower offer ($165k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $165k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#67 in IA, #1,477 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Mason City Community School District (town): math 50% / reading 58% proficiency, ranked #271 of 289 in IA (top 94%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Harding Elementary School (math 52% / reading 57%, grade C, #462 of 616 statewide, top 79%, 380 students, 54% FRL); John Adams Middle School (math 46% / reading 54%, grade C, #216 of 246 statewide, top 88%, 480 students, 56% FRL); Mason City High School (math 50% / reading 63%, grade C, #286 of 336 statewide, top 85%, 956 students, 46% FRL).
• Watch-outs: built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 158 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 54 units permitted in Cerro Gordo County in 2024 (6 in 5+ unit buildings).
• Cerro Gordo County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $64k; list at $170k implies a 166% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $48k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.3% vs local median 5.3% in Mason 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.

Questions for listing agent

• It's been on market 59 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1914 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.