147 Hillcrest Rdg

Montezuma, IA 50171

$399,000D

2 bd · 1.0 ba · 888 sqft · Built 1990 · SingleFamily · Active · 328 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $860/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$382
• HOA: −$0
• Vac / Maint / Mgmt: −$181
• Net cashflow: $-1,795/mo
• Annual: $-21,536/yr
• Cap rate: 0.90%
• Cash-on-cash: -19.28%
• DSCR: 0.14
• 1% rule: 0.22%
• Cash to close: $111,720

Investor read

• This is a 2-bed/1.0-bath single-family listed at $399k.
• At list price, monthly cash flow is $-2k ($-22k/yr) — negative.
• To cash-flow at today's rent, offer at most $82k (79.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (78.4% below list).
• It's been on market 328 days — a 12% lower offer ($351k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $82k (79.5% below list) — sets the bar for cash-flow.
• In year one you build about $43k of equity ($3k loan paydown + $40k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#228 in IA, #4,319 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, cost of living A+; Watch: amenities F, commute F, employment F.
• Montezuma Community School District (rural): math 73% / reading 79% proficiency, ranked #55 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: 66 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.
• 4 sale attempts since 19y ago; this cycle's ask has dropped $50k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $270k; 48% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$69k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 0.9% vs local median 1.5% in Montezuma — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 328 days. Have you received any prior offers? Is the seller open to a 79% 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 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?
• 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.