506 5th St

Armstrong, IA 50514

$109,000D+

2 bd · 1.5 ba · 864 sqft · Built 1948 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $855/mo
• Mortgage (P&I): −$572
• Tax + insurance: −$146
• HOA: −$0
• Vac / Maint / Mgmt: −$180
• Net cashflow: $-42/mo
• Annual: $-503/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.65%
• DSCR: 0.93
• 1% rule: 0.78%
• Cash to close: $30,520

Investor read

• This is a 2-bed/1.5-bath single-family listed at $109k.
• At list price, monthly cash flow is $-42 ($-503/yr) — negative.
• To cash-flow at today's rent, offer at most $102k (6.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (21.5% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $86k (21.5% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($754 loan paydown + $5k appreciation (4.6% local appreciation)).
• Location reads 71/100 on livability (#352 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• North Union Community School District (rural): math 68% / reading 83% proficiency, ranked #73 of 289 in IA (top 25%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 6 active listings in the ZIP; 11 units permitted in Emmet County in 2024 (0 in 5+ unit buildings).
• Emmet County population projected at -23% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $93k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (4.6% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 1948 — 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.