425 NE Broadway Ave

Des Moines, IA 50313

$128,500C+

2 bd · 1.0 ba · 1,038 sqft · Built 1939 · SingleFamily · Active · 147 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,325/mo
• Mortgage (P&I): −$674
• Tax + insurance: −$214
• HOA: −$0
• Vac / Maint / Mgmt: −$278
• Net cashflow: $158/mo
• Annual: $1,902/yr
• Cap rate: 7.77%
• Cash-on-cash: 5.29%
• DSCR: 1.24
• 1% rule: 1.03%
• Cash to close: $35,980

Investor read

• This is a 2-bed/1.0-bath single-family listed at $128k. Condition is rated good.
• At list price, monthly cash flow is $158 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $128k).
• It's been on market 147 days — a 12% lower offer ($113k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $113k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $888 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#63 in IA, #1,432 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, schools D+, crime F.
• Saydel Community School District (suburban): math 46% / reading 51% proficiency, ranked #283 of 289 in IA (top 98%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+13.1%/yr); 156 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); 2,953 units permitted in Polk County in 2024 (540 in 5+ unit buildings).
• Polk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $10k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $36k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 7.8% vs local median 3.1% in Des Moines — 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 147 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1939 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.