518 Linn St

Fairfax, IA 52228

$290,000D-

3 bd · 2.5 ba · 1,344 sqft · Built 1975 · SingleFamily · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,997/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$356
• HOA: −$0
• Vac / Maint / Mgmt: −$419
• Net cashflow: $-300/mo
• Annual: $-3,597/yr
• Cap rate: 5.05%
• Cash-on-cash: -4.43%
• DSCR: 0.80
• 1% rule: 0.69%
• Cash to close: $81,200

Investor read

• This is a 3-bed/2.5-bath single-family listed at $290k.
• At list price, monthly cash flow is $-300 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $237k (18.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $200k (31.1% below list).
• It's been on market 29 days — a 2% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (31.1% below list) — sets the bar for 1% rule.
• In year one you build about $31k of equity ($2k loan paydown + $29k appreciation (10.0% local appreciation)).
• Location reads 74/100 on livability (#232 in IA, #4,402 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, health & safety F.
• College Community School District (urban): math 62% / reading 70% proficiency, ranked #173 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Prairie Hill Elementary School (math 62% / reading 52%, grade C+, #436 of 616 statewide, top 74%, 467 students, 34% FRL); Prairie Point (math 62% / reading 74%, grade A-, #131 of 246 statewide, top 53%, 1,324 students, 34% FRL); Prairie High School (math 62% / reading 78%, grade B+, #146 of 336 statewide, top 45%, 1,298 students, 31% FRL).
• Market conditions: 42 active listings in the ZIP; 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.
• 2 sale attempts since 10y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $251k; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$50k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.1% vs local median 2.6% in Fairfax — 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?
• Built in 1975 — 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.
• 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.