205 Washington Ave

Sheldon, IA 51201

$174,900D

3 bd · 2.0 ba · 1,601 sqft · Built 1940 · SingleFamily · Active · 194 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,310/mo
• Mortgage (P&I): −$917
• Tax + insurance: −$217
• HOA: −$0
• Vac / Maint / Mgmt: −$275
• Net cashflow: $-99/mo
• Annual: $-1,185/yr
• Cap rate: 5.62%
• Cash-on-cash: -2.42%
• DSCR: 0.89
• 1% rule: 0.75%
• Cash to close: $48,972

Investor read

• This is a 3-bed/2.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $-99 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $157k (10.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $131k (25.1% below list).
• It's been on market 194 days — a 12% lower offer ($154k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (25.1% below list) — sets the bar for 1% rule.
• 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 84/100 on livability (#23 in IA, #688 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Sheldon Community School District (town): math 74% / reading 78% proficiency, ranked #63 of 289 in IA (top 22%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: East Elementary School (math 87% / reading 72%, grade A, #71 of 616 statewide, top 15%, 450 students, 44% FRL); Sheldon Middle School (math 70% / reading 78%, grade A, #83 of 246 statewide, top 34%, 320 students, 47% FRL); Sheldon High School (math 73% / reading 81%, grade A-, #60 of 336 statewide, top 21%, 342 students, 39% FRL).
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 49 active listings in the ZIP; 13 units permitted in O'Brien County in 2024 (0 in 5+ unit buildings).
• O'Brien County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 5.6% vs local median 3.6% in Sheldon — 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 194 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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.
• 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.