85 E Johnson St

Fond du Lac, WI 54935

$170,000C

4 bd · 2.0 ba · 2,065 sqft · Built 1904 · Other · Active · 297 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,681/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$309
• HOA: −$0
• Vac / Maint / Mgmt: −$353
• Net cashflow: $127/mo
• Annual: $1,525/yr
• Cap rate: 7.19%
• Cash-on-cash: 3.20%
• DSCR: 1.14
• 1% rule: 0.99%
• Cash to close: $47,600

Investor read

• This is a 4-bed/2.0-bath other listed at $170k.
• At list price, monthly cash flow is $127 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $168k (1.1% below list).
• It's been on market 297 days — a 12% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (12.0% 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 74/100 on livability (#170 in WI, #4,627 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, employment C-, crime D.
• Fond Du Lac School District (urban): math 34% / reading 31% proficiency, ranked #255 of 342 in WI (top 75%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1904 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+11.2%/yr); 155 active listings in the ZIP; 154 units permitted in Fond du Lac County in 2024 (0 in 5+ unit buildings).
• Fond du Lac County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $90k; list at $170k implies a 89% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $48k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.2% vs local median 2.6% in Fond du Lac — 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.
• This rent runs 32% of the median local income ($63k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 297 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1904 — 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.
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.