1619-1621 Gaines St

Davenport, IA 52804

$122,500B+

4 bd · 4.5 ba · 2,526 sqft · Built 1910 · MultiFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,562/mo
• Mortgage (P&I): −$642
• Tax + insurance: −$191
• HOA: −$0
• Vac / Maint / Mgmt: −$538
• Net cashflow: $1,191/mo
• Annual: $14,290/yr
• Cap rate: 17.96%
• Cash-on-cash: 41.66%
• DSCR: 2.85
• 1% rule: 2.09%
• Cash to close: $34,300

Investor read

• This is a 2 × 3-bed/1-bath units multifamily listed at $122k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive. Per door: $595/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $122k).
• It's been on market 22 days — a 2% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $847 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#126 in IA, #2,312 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, crime F.
• Davenport Community School District (urban): math 43% / reading 50% proficiency, ranked #288 of 289 in IA (top 100%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+4.0%/yr); 162 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 805 units permitted in Scott County in 2024 (479 in 5+ unit buildings).
• Scott County population projected at +19% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 7y 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 $92k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $34k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 18.0% vs local median 4.4% in Davenport — 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.
• At $2,562/mo this rent would consume 47% of the median local household income ($66k/yr) (locally 830% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• Built in 1910 — 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.