2825 New London Rd

New London, IA 52645

$270,000D-

3 bd · 2.0 ba · 1,586 sqft · Built 2018 · SingleFamily · Pending · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,186/mo
• Mortgage (P&I): −$1,416
• Tax + insurance: −$395
• HOA: −$0
• Vac / Maint / Mgmt: −$249
• Net cashflow: $-874/mo
• Annual: $-10,490/yr
• Cap rate: 2.41%
• Cash-on-cash: -13.88%
• DSCR: 0.38
• 1% rule: 0.44%
• Cash to close: $75,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $270k.
• At list price, monthly cash flow is $-874 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $116k (57.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $119k (56.1% below list).
• It's been on market 75 days — a 6% lower offer ($254k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (57.2% below list) — sets the bar for cash-flow.
• In year one you build about $9k of equity ($2k loan paydown + $7k appreciation (2.5% local appreciation)).
• Location reads 76/100 on livability (#188 in IA, #3,417 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• New London Community School District (rural): math 63% / reading 68% proficiency, ranked #194 of 289 in IA (top 67%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 13 active listings in the ZIP; 30 units permitted in Henry County in 2024 (8 in 5+ unit buildings).
• Henry County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• By year 5, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• It's been on market 75 days. Have you received any prior offers? Is the seller open to a 57% concession, seller financing, or rate buy-down credit?
• 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?
• 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.