120 Shannon Dr #10

North Liberty, IA 52317

$122,000C

2 bd · 1.0 ba · 838 sqft · Built 1996 · Condo · Active · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,392/mo
• Mortgage (P&I): −$640
• Tax + insurance: −$261
• HOA: −$150
• Vac / Maint / Mgmt: −$292
• Net cashflow: $49/mo
• Annual: $583/yr
• Cap rate: 7.42%
• Cash-on-cash: 4.04%
• DSCR: 1.18
• 1% rule: 1.14%
• Cash to close: $34,160

Investor read

• This is a 2-bed/1.0-bath condo listed at $122k.
• At list price, monthly cash flow is $49 ($583/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $122k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $843 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#18 in IA, #596 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• Iowa City Community School District (urban): math 65% / reading 70% proficiency, ranked #174 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: James Van Allen Elementary School (math 73% / reading 66%, grade A-, #224 of 616 statewide, top 42%, 432 students, 27% FRL); North Central Junior High School (math 72% / reading 75%, grade A, #86 of 246 statewide, top 35%, 622 students, 24% FRL); Liberty High School (math 71% / reading 80%, grade A-, #79 of 336 statewide, top 25%, 1,167 students, 25% FRL) — zoned schools at 25% FRL track the district average.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising fast (+7.6%/yr); 343 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 714 units permitted in Johnson County in 2024 (158 in 5+ unit buildings).
• Johnson County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 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.
• At projected returns (-3.0% appreciation + 7.6% rent growth), your $34k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% vs local median 3.1% in North Liberty — 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 is only 16% of the median local income ($105k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.