402 W Adams St

Mount Ayr, IA 50854

$87,900B-

2 bd · 1.0 ba · 1,008 sqft · Built 1960 · Other · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $933/mo
• Mortgage (P&I): −$461
• Tax + insurance: −$119
• HOA: −$0
• Vac / Maint / Mgmt: −$196
• Net cashflow: $157/mo
• Annual: $1,885/yr
• Cap rate: 8.44%
• Cash-on-cash: 7.66%
• DSCR: 1.34
• 1% rule: 1.06%
• Cash to close: $24,612

Investor read

• This is a 2-bed/1.0-bath other listed at $88k.
• At list price, monthly cash flow is $157 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($933 rent vs $88k).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $6k of equity ($608 loan paydown + $5k appreciation (6.0% local appreciation)).
• Location reads 80/100 on livability (#90 in IA, #1,875 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: employment C-, amenities F, commute F.
• Mount Ayr Community School District (rural): math 80% / reading 78% proficiency, ranked #41 of 289 in IA (top 14%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: 20 active listings in the ZIP; 3 units permitted in Ringgold County in 2024 (0 in 5+ unit buildings).
• Ringgold County population projected at -10% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 4y ago 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.
• Current owner paid $60k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (6.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1960 — 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 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?
• 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.