705 4th St

Highland, IL 62249

$127,500F

2 bd · 1.0 ba · 1,017 sqft · Built 2004 · Condo · Active · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,171/mo
• Mortgage (P&I): −$669
• Tax + insurance: −$281
• HOA: −$100
• Vac / Maint / Mgmt: −$246
• Net cashflow: $-125/mo
• Annual: $-1,502/yr
• Cap rate: 5.12%
• Cash-on-cash: -4.21%
• DSCR: 0.81
• 1% rule: 0.92%
• Cash to close: $35,700

Investor read

• This is a 2-bed/1.0-bath condo listed at $128k.
• At list price, monthly cash flow is $-125 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $123k (3.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $117k (8.2% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $117k (8.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $882 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#185 in IL, #3,530 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Highland CUSD 5 (town): math 39% / reading 41% proficiency, ranked #134 of 620 in IL (top 22%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Highland Primary School (589 students, 0% FRL); Highland Middle School (math 40% / reading 41%, grade F, #136 of 665 statewide, top 21%, 607 students, 0% FRL); Highland High School (math 39% / reading 40%, grade F, #88 of 693 statewide, top 14%, 859 students, 0% FRL) — zoned schools average 0% FRL vs 24% district-wide (24 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 115 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 336 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $74k; list at $128k implies a 72% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 2.3% in Highland — 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.

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?
• 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.
• 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 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.