918 21st Ave

Rockford, IL 61104

$45,000B-

2 bd · 1.0 ba · 1,700 sqft · Built 1920 · SingleFamily · Pending · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,308/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$139
• HOA: −$0
• Vac / Maint / Mgmt: −$275
• Net cashflow: $658/mo
• Annual: $7,901/yr
• Cap rate: 23.85%
• Cash-on-cash: 62.70%
• DSCR: 3.79
• 1% rule: 2.91%
• Cash to close: $12,600

Investor read

• This is a 2-bed/1.0-bath single-family listed at $45k.
• At list price, monthly cash flow is $658 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $311 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#876 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities F, commute F.
• Rockford SD 205 (urban): math 12% / reading 16% proficiency, ranked #533 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Riverdahl Elem School (math 2% / reading 2%, grade F, #1,927 of 2,056 statewide, top 100%, 561 students, 0% FRL); Rockford Envrnmntl Science Acad (math 0% / reading 7%, grade F, #652 of 665 statewide, top 98%, 1,051 students, 0% FRL); Jefferson High School (math 3% / reading 9%, grade F, #608 of 693 statewide, top 88%, 2,114 students, 0% FRL) — zoned schools average 0% FRL vs 73% district-wide (73 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: property tax is 3.2% of price; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.7%/yr); 69 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 285 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $13k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 23.8% vs local median 6.1% in Rockford — 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.
• At $1,308/mo this rent would consume 46% of the median local household income ($34k/yr) (locally 1406% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F 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.