704 N Main St

Mount Pleasant, IA 52641

$139,900D

4 bd · 2.0 ba · 1,524 sqft · Built 1938 · SingleFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,120/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$197
• HOA: −$0
• Vac / Maint / Mgmt: −$235
• Net cashflow: $-46/mo
• Annual: $-554/yr
• Cap rate: 5.90%
• Cash-on-cash: -1.41%
• DSCR: 0.94
• 1% rule: 0.80%
• Cash to close: $39,172

Investor read

• This is a 4-bed/2.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $-46 ($-554/yr) — negative.
• To cash-flow at today's rent, offer at most $132k (5.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $112k (20.0% below list).
• It's been on market 48 days — a 3% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (20.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#20 in IA, #662 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: commute F.
• Mount Pleasant Community School District (town): math 63% / reading 66% proficiency, ranked #207 of 289 in IA (top 72%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Harlan Elementary School (math 57% / reading 57%, grade C+, #436 of 616 statewide, top 74%, 220 students, 48% FRL); Mount Pleasant Middle School (math 64% / reading 70%, grade A-, #140 of 246 statewide, top 60%, 406 students, 49% FRL); Mount Pleasant High School (math 65% / reading 67%, grade B, #200 of 336 statewide, top 60%, 582 students, 45% FRL).
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 93 active listings in the ZIP; 30 units permitted in Henry County in 2024 (8 in 5+ unit buildings).
• Henry County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 5.9% vs local median 3.3% in Mount Pleasant — 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

• 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 48 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1938 — 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 B-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.