505 3rd Ave

Eau Claire, WI 54703

$225,000F

2 bd · 2.0 ba · 1,968 sqft · Built 1949 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,370/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$390
• HOA: −$0
• Vac / Maint / Mgmt: −$288
• Net cashflow: $-488/mo
• Annual: $-5,856/yr
• Cap rate: 3.69%
• Cash-on-cash: -9.30%
• DSCR: 0.59
• 1% rule: 0.61%
• Cash to close: $63,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-488 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $139k (38.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $137k (39.1% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $137k (39.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 89/100 on livability (#10 in WI, #121 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+.
• Eau Claire Area School District (urban): math 38% / reading 43% proficiency, ranked #150 of 342 in WI (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.0%/yr); 212 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 583 units permitted in Eau Claire County in 2024 (325 in 5+ unit buildings).
• Eau Claire County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 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.
• Cap rate 3.7% vs local median 2.4% in Eau Claire — 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?
• Built in 1949 — 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.
• 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.