2005 Washington Ave SE

Cedar Rapids, IA 52403

$124,900C

3 bd · 1.0 ba · 1,154 sqft · Built 1917 · SingleFamily · Pending · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,394/mo
• Mortgage (P&I): −$655
• Tax + insurance: −$221
• HOA: −$0
• Vac / Maint / Mgmt: −$293
• Net cashflow: $225/mo
• Annual: $2,701/yr
• Cap rate: 8.46%
• Cash-on-cash: 7.72%
• DSCR: 1.34
• 1% rule: 1.12%
• Cash to close: $34,972

Investor read

• This is a 3-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $225 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 56 days — a 3% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#134 in IA, #2,474 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, commute F.
• Cedar Rapids Community School District (urban): math 50% / reading 59% proficiency, ranked #265 of 289 in IA (top 92%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Johnson Steam Academy School (math 32% / reading 37%, grade F, #595 of 616 statewide, top 97%, 346 students, 74% FRL); Mckinley Steam Academy (math 45% / reading 55%, grade C, #216 of 246 statewide, top 88%, 448 students, 52% FRL); George Washington High School (math 44% / reading 62%, grade C-, #296 of 336 statewide, top 88%, 1,291 students, 49% FRL) — zoned schools average 59% FRL vs 43% district-wide (15 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1917 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+14.7%/yr); 236 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,023 units permitted in Linn County in 2024 (456 in 5+ unit buildings).
• Linn County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $35k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 8.5% vs local median 3.5% in Cedar Rapids — 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 56 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1917 — 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?
• 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.