222 & 224 W Elm St

Cherokee, IA 51012

$140,000B-

4 bd · 4.0 ba · 1,952 sqft · Built 1905 · MultiFamily · Active · 287 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,807/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$233
• HOA: −$0
• Vac / Maint / Mgmt: −$379
• Net cashflow: $460/mo
• Annual: $5,520/yr
• Cap rate: 10.24%
• Cash-on-cash: 14.08%
• DSCR: 1.63
• 1% rule: 1.29%
• Cash to close: $39,200

Investor read

• This is a 2 × 2-bed/2.0-bath units multifamily listed at $140k. Condition is rated fair.
• At list price, monthly cash flow is $460 ($6k/yr) — positive. Per door: $230/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 287 days — a 12% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $968 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#83 in IA, #1,698 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, amenities F, commute F.
• Cherokee Community School District (town): math 65% / reading 67% proficiency, ranked #191 of 289 in IA (top 66%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1905 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 44 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 10 units permitted in Cherokee County in 2024 (0 in 5+ unit buildings).
• Cherokee County population projected at -23% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $70k; list at $140k implies a 100% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.2% vs local median 4.9% in Cherokee — 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

• It's been on market 287 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1905 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?

Repairs flagged (vision-AI assessment)

• Major: kitchen cabinets — severely dated and in poor condition
• Major: bathroom cabinets — severely dated and in poor condition
• Major: kitchen countertops — severely dated and in poor condition
• Major: bathroom fixtures — severely dated and in poor condition