320 Webster St

Merrill, IA 51038

$135,500C+

3 bd · 1.0 ba · 1,376 sqft · Built 1920 · SingleFamily · Pending · 113 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,207/mo
• Mortgage (P&I): −$711
• Tax + insurance: −$193
• HOA: −$0
• Vac / Maint / Mgmt: −$253
• Net cashflow: $50/mo
• Annual: $598/yr
• Cap rate: 6.73%
• Cash-on-cash: 1.58%
• DSCR: 1.07
• 1% rule: 0.89%
• Cash to close: $37,940

Investor read

• This is a 3-bed/1.0-bath single-family listed at $136k.
• At list price, monthly cash flow is $50 ($598/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (10.9% below list).
• It's been on market 113 days — a 9% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (10.9% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($937 loan paydown + $5k appreciation (3.5% local appreciation)).
• Location reads 68/100 on livability (#425 in IA) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety D, schools F, amenities F.
• Le Mars Community School District (town): math 73% / reading 72% proficiency, ranked #96 of 289 in IA (top 33%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 11 active listings in the ZIP; 147 units permitted in Plymouth County in 2024 (112 in 5+ unit buildings).
• 2 sale attempts 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 $69k; list at $136k implies a 96% gain — meaningful room to come down on a strong offer.
• At projected returns (3.5% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 113 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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 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?
• 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.